Long-term growth can only come if entry-level segment grows, recovery expected in 2-3 years: RC Bhargava
The carmaker’s net profit zoomed 80.3 per cent in Q2FY24 to Rs 3,716 crore
- Oct 27, 2023,
- Updated Oct 27, 2023 4:41 PM IST
India’s largest carmaker Maruti Suzuki India Limited (MSIL) on Friday recorded its highest-ever quarterly sales volumes, net sales and net profit in the July-September quarter (Q2) of FY24. During the quarter, 552,055 vehicles were sold. Sales in the domestic market were at 482,731 units, while 69,324 cars were exported. In the corresponding period last year total sales stood at 517,395 units. During the quarter, the company registered net sales of Rs 35,535 crore against Rs 28,543 crore in the same period the previous year owing to higher sales volume and product mix.
MSIL Chairman RC Bhargava said while most issues were absent during Q2 and normalcy appeared to have returned, sales of entry-level cars dipped. “Given the kind of demographics and consumers we have in India, demand for entry-level cars has to come back. If income levels in India grow and prices of cars stop increasing, affordability factor, which was a cause of small car sales growing down, could come back,” Bhargava said.
He added that MSIL’s waiting list reduced by half from 400,000 cars. “Now that we’ve got 1 million in the first half in terms of production, the probability of getting to 2 million production in second half goes up. There’s also a jump in CNG vehicles and it’s a major change that’s happening in the market. At the same time, our EV programme is as per schedule. We’ll start production in 2024-25 and launch six models by 2030-31,” he said.
The company reported a net profit of Rs 3,716 crore, an increase of 80.3 per cent over Rs 2,061 crore in Q2FY23. It sold a total of 1,050,085 units during the period, a growth of 6.6 per cent over H1FY23. Sales in the domestic market stood at 917,543 units and exports at 132,542 units. The company made a net profit of Rs 6,201 crore in H1FY24 as against Rs 3,074 crore in H1FY23.
Bhargava expects that the recovery in entry-level segment will come in the next 2-3 years. “In the next 2-3 years, people will be able to afford small cars. Growth of industry is projected at 5.5 per cent. We expect to grow around 10 per cent or so. We'll be growing better than the industry but we’ll merely be growing back what we've lost. Growth projections for next year and not very optimistic as a result of the fact that there’s been a degrowth in the small car segment,” he adds.
He adds that the growth in the entry-level market is an essential requirement for the growth of overall industry in India.
India’s largest carmaker Maruti Suzuki India Limited (MSIL) on Friday recorded its highest-ever quarterly sales volumes, net sales and net profit in the July-September quarter (Q2) of FY24. During the quarter, 552,055 vehicles were sold. Sales in the domestic market were at 482,731 units, while 69,324 cars were exported. In the corresponding period last year total sales stood at 517,395 units. During the quarter, the company registered net sales of Rs 35,535 crore against Rs 28,543 crore in the same period the previous year owing to higher sales volume and product mix.
MSIL Chairman RC Bhargava said while most issues were absent during Q2 and normalcy appeared to have returned, sales of entry-level cars dipped. “Given the kind of demographics and consumers we have in India, demand for entry-level cars has to come back. If income levels in India grow and prices of cars stop increasing, affordability factor, which was a cause of small car sales growing down, could come back,” Bhargava said.
He added that MSIL’s waiting list reduced by half from 400,000 cars. “Now that we’ve got 1 million in the first half in terms of production, the probability of getting to 2 million production in second half goes up. There’s also a jump in CNG vehicles and it’s a major change that’s happening in the market. At the same time, our EV programme is as per schedule. We’ll start production in 2024-25 and launch six models by 2030-31,” he said.
The company reported a net profit of Rs 3,716 crore, an increase of 80.3 per cent over Rs 2,061 crore in Q2FY23. It sold a total of 1,050,085 units during the period, a growth of 6.6 per cent over H1FY23. Sales in the domestic market stood at 917,543 units and exports at 132,542 units. The company made a net profit of Rs 6,201 crore in H1FY24 as against Rs 3,074 crore in H1FY23.
Bhargava expects that the recovery in entry-level segment will come in the next 2-3 years. “In the next 2-3 years, people will be able to afford small cars. Growth of industry is projected at 5.5 per cent. We expect to grow around 10 per cent or so. We'll be growing better than the industry but we’ll merely be growing back what we've lost. Growth projections for next year and not very optimistic as a result of the fact that there’s been a degrowth in the small car segment,” he adds.
He adds that the growth in the entry-level market is an essential requirement for the growth of overall industry in India.