Maruti Suzuki India Ltd (MSIL) is scaling back its production in response to lower-than-expected passenger vehicle demand in the first quarter of the 2024-25 fiscal year. Suzuki Motor Corporation (SMC), the company's majority shareholder, confirmed this move, as per the Business Standard report.
Livemint could not independently verify the news development.
“We are currently adjusting production to reduce market stock and are closely monitoring demand trends. India will be in a critical period with the upcoming festival season, so we will closely monitor demand trends,” Suzuki Motor Corporation told analysts in a conference call, Business Standard reported quoting the transcript of the call.
Despite a 7.4 per cent year-on-year increase in production to 496,000 units during the first quarter, sales growth lagged significantly, rising by only 1.2 per cent to 427,000 units, according to the Business Standard report.
This slowdown in car sales has sparked concerns throughout the Indian auto industry, accumulating unsold vehicles at dealerships. The Federation of Automobile Dealers Associations (FADA) has expressed alarm over the situation, highlighting that its members have approximately 730,000 unsold vehicles, enough to cover more than two months of sales. In contrast, the Society of Indian Automobile Manufacturers (SIAM) estimates the figure to be closer to 400,000 units, per the Business Standard report.
Suzuki Motor Corporation further explained the situation to analysts, stating, “The Indian market is usually a bit slower in the first quarter than the rest of the year, but this year (demand) has been slower than expected, especially due to the (Lok Sabha) election and adverse weather, including heavy rain and heat waves. As inventories have increased, we are making adjustments...This year, the festival season starts in late August, a little earlier than the previous year, and the higher the demand, the bigger the volume for the whole period becomes."
