Maruti Suzuki share price fell in afternoon trade today after the country's largest car maker said it was recalling 63,493 petrol smart hybrid (SHVS) variants of Ciaz, Ertiga and XL6 vehicles manufactured between January 1, 2019 to November 21, 2019. Maruti Suzuki share price fell up to 2.04% to Rs 6,862.15 against previous close of Rs 7,005.60 on BSE.
Maruti Suzuki share price has lost 3.39% in last three days. In last one year, the large cap stock is down 4.57% and fallen 7.8% since the beginning of this year.
33 lakh shares changed hands amounting to turnover of Rs 23 crore on BSE.
Maruti in a communication to bourses said, "The company will inspect 63,493 vehicles of petrol SHVS of Ciaz, Ertiga and XL6 for a possible issue with the Motor Generator Unit (MGU). A possible defect may have occurred in the MGU during manufacturing by an overseas global part supplier. In the interest of its customers, Maruti Suzuki has decided to proactively recall the vehicles for inspection and those found OK will be released immediately. Vehicles requiring replacement of faulty part will be retained for part replacement free of cost."
On December 3, Maruti Suzuki India said it would raise prices across various models from January 2020. The company said the decision to increase prices was taken over rising input costs over the past year.
"You are kindly informed that over the past year, the cost of the company's vehicles has been impacted adversely due to increase in various input costs. Hence, it has become imperative for the Company to pass on some impact of the above additional cost to customers through a price increase across various models in January 2020. This price increase shall vary for different models."
The Indian auto sector has been facing a huge downturn for over one year now.
Even though the festive season saw some improvement in sales for Maruti -- and it posted a 2.3 per cent increase in sales in October breaking a series of seven straight months of decline -- its overall sales fell again in November, posting a 3.3 per cent drop in PV sales over the last year.
In all, the sales of all major auto companies, including Tata Motors, Honda Cars, Eicher Motors, and Mahindra & Mahindra, saw a significant decline in sales in November. Industry experts say the negative trend would continue in the coming months as the April-2020 deadline for using BS-IV vehicles approaches.
Most auto companies, including Maruti, are trying their best to reduce their inventory on BS-IV models to zero by then, as no BS-IV vehicle can be sold from April 1 next year.