New Delhi, November 5 (Language) Maruti Suzuki India (MSI) wants to bring more ‘flexibility’ in its production processes according to the emerging market conditions. A senior official of the company has said this.
The country’s largest carmaker is focusing on increasing production of high-selling utility vehicles while cutting down on production of entry-level cars.
“The demand gap between the utility and small car segments continues,” Rahul Bharti, executive officer, corporate affairs, Maruti Suzuki India, said in an analyst call. The company is working to increase flexibility in operations to produce vehicles in line with the growing market demand.
He said the company’s recent decline in margins was due to it producing some low-selling cars.
Bharti said that we do not have enough capacity to produce the cars that are in demand. If we had flexibility in both, be it semiconductor supply or domestic production, perhaps we would not have faced such a problem.
MSI’s Haryana and Gujarat plants currently have an annual installed capacity of 23 lakh units. Bharti said that the cost of this initiative is quite small.
Regarding the decline in sales of entry-level cars, he said the cost of acquiring such cars has increased with regulatory regulations becoming more intense over the years. “There has been no increase in customer income in this segment,” he said. We are hoping that sooner or later their income will increase and the small car market will be able to revive.
Bharti said that the number of first-time car buyers has also decreased.
“‘The number of first-time buyers we have in the market is down by about 10 per cent,’ he said. “We believe that this segment will rebound at some point as the incomes of the population of this segment increase along with the costs and regulatory rules do not become more stringent.”
According to data from SIAM, the body of automobile manufacturers, wholesale sales of entry-level cars in India declined to 35,000 units in the second quarter of the current financial year. It was at a high of 1.38 lakh cars in July-September, 2018-19.
On the question related to exports, Bharti said that the company aims to triple its exports in future. The company aims to increase exports to 7.5 to eight lakh units by 2030-31. However, Maruti remains the country’s largest car exporter.
Language Ajay Ajay