Slowdown Blues: Maruti Suzuki, Tata Motors cut production; festive sales get lukewarm response
BusinessToday.In October 9, 2019
Maruti Suzuki India and Tata Motors cut production in September despite expectations that demand would revive in ongoing festive season. Piled-up inventory at dealerships and factories has been cited as the prime reason for the drop in production.
Maruti Suzuki cut its production by 17.48 per cent in September -- eighth straight month when India's largest passenger vehicle company has reduced its output. "Maruti Suzuki India (MSI) had produced a total of 1,32,199 units in September as against 1,60,219 units in the year-ago month," the country's largest carmaker said in a regulatory filing.
The production of mini and compact segment cars, including Alto, New WagonR, Celerio, Ignis, Swift, Baleno and Dzire, dropped by 14.91 per cent to 98,337 units versus 1,15,576 units in the year-ago period.
Festive offers have also done little to cheer up the market. Maruti has offered discounts to clear up inventory. The company is offering discounts of up to Rs 1.3 lakh on Maruti Suzuki S-Cross; and Rs 95,000 and Rs 85,000 on Ciaz and Baleno, respectively. Maruti Suzuki Ignis is being rolled out on a discount of Rs 75,000.
Similarly, Tata Motors has also reduced its production of passenger vehicles by 63 per cent to 6,976 units in September as compared to 18,855 units in the same period last year.
Sale of passenger vehicles in India registered another steep monthly decline in September, falling by 20.5 per cent over the same month last year as uncertainty over a potential cut in GST rate for cars kept customers away from dealerships for much of the month.
All the major carmakers saw a high double-digit decline in September. Maruti Suzuki saw a 27 per cent drop while arch-rival Hyundai registered a 14.8 per cent drop. Tata Motors witnessed the heaviest drop at 56 per cent followed by Nissan at 55.6 per cent, Honda at 37 per cent, Ford at 32.5 per cent and Mahindra at 28 per cent.
Edited by Manoj Sharma