Aided by a sustained recovery in demand for entry-level cars, hatchbacks and utility vehicles, Maruti Suzuki India Ltd on Monday reported a 9.9% year-on-year (y-o-y) growth in domestic wholesale to 147,483 units in February. The automaker also replenished inventory at dealerships after improved sales during the October to December period.
The country’s largest passenger vehicle manufacturer had sold 134,150 units in the year-ago period. On a sequential basis, factory dispatches also improved from January, when the company had sold 142,604 units.
The growth in wholesales though comes on a very low base, with the company reducing production due to falling demand for vehicles and transition to Bharat Stage-VI emission norms in the corresponding period. In FY20 the company reported 17% decline in sales. Hatchback and compact car sales grew by 7.3% y-o-y to 104,476 units during the month, while those of utility vehicles rose 18.9% to 26,884 units.
Maruti’s exports also increased by 11.9% y-o-y to 11,486 units during the month. Despite a decent recovery in retail sales, auto makers like Maruti Suzuki and others are concerned about the negative impact of rising fuel prices and Covid infections in certain states on vehicle demand.
The company though reported its highest ever production of vehicles in October expecting robust demand during the festive season. Demand for Maruti’s compact vehicles has continued to grow beyond the festive season as customers are preferring personal mobility to avoid Covid infections. Maruti’s total sales during the month increased by 11.8% y-o-y to 164,469 units, one of the highest for the company.
Investors have been bullish about Maruti's near-term prospects since it is also likely to benefit from a shift in demand for hatchbacks given the increasing preference for personal mobility on fears of contracting the virus.
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