Shashank Srivastava, Senior Executive Officer (Marketing and Sales), Maruti Suzuki India Ltd, says “the stock in the industry is now roughly 3,35,000-3,36,000 which is about 30 days of inventory and that is the trend which we have observed in Maruti Suzuki also. Going forward, if the retail sales are good in the balanced part of the festive season that is in the next two weeks, we will see a reduction in the inventory. However, it really depends on how the retail moves in the next two weeks.”
Good sales number for October. But in November, will it capture the real festive season? Can we see the sales momentum surpassing the 2 lakh? The momentum continues this quarter and this month as well?
Yes, so first of all the 2 lakh number that we came so close to in this last month of October is both the domestic passenger vehicle and the export numbers put together as also the OEM supply. These are wholesale numbers, so while the retail sales in the first 15 days should be really positive because of the Dhanteras, Diwali, Bhai dooj festival, it really depends on how the retail sales happen in this period. Remember, the next month is December, generally the channel does not add stock in that month because they do not want to carry the last year’s model stock. Therefore I would not expect the numbers to be much larger, it all really depends on how the retail moves in the first 15 days of October.
How many deliveries have you planned on Dhanteras this time round, this year? Any number internally which you are targeting or have in mind?
It is difficult for me to give you a forward looking number for Dhanteras but roughly if you see the entire festive season, roughly about 25-26% of the annual sale happens in this period, which is August 17 till Bhai dooj. We are still in the last leg of this period and therefore the expectation in the industry is that in this period more than 1 million vehicles will be sold. The total sales expected in the industry this year is about 41 to 41.3 lakh. Maruti Suzuki numbers should be in that 4,50,000 to 5,00,000 range.
Let us talk a little more granularly as far as your models are concerned. Right now, which is your top selling model this festive season where inquiries are very strong and you expect sales to pick up? Could the top list include UV segment cars?
We have in the MUV space basically two segments – SUV and MPV. MPV is Ertiga and XL6 and the Invicto. All of those are doing great numbers. In the SUV space the Fronx, the Jimny, the Brezza and Vitara are also doing great numbers. So I would expect this trend to continue in the rest of the festive period.
Of course, as you rightly pointed out, MUV has been doing well. In fact, much of the growth that you see in the industry in this financial year is largely driven by the MUV sector. MUV percentage of the total sales is now 59%, with SUV almost 50% and 9% for MPVs. I think this trend will continue for the balanced part of the year as well.
I just wanted to roll back and talk about the festive cheer a bit. As far as the rural segment is concerned, how would you rate this year versus let us say, last year?
Yes, it is better. Overall also, the numbers are a lot better, it is about 16% growth. And in rural areas, the growth is a little higher, as is expected in this period. On a cumulative basis for the financial year, forget about the festive season, then also the rural growth is roughly around 11% compared with 8.5% for the urban areas, a little bit higher than the urban areas.
We saw the same trend in the festive season as well. So far, the rural sentiments have held very much. We need to be cautious throughout the balanced part of the year, because we have to see what will be the output of the Kharif and also how the Rabi sowing pattern goes in the balanced sowing period.
Okay, so rural is looking up, but you had also seen a build-up of inventory, just because you were expecting high sales in the festive season. What is the current inventory level and inventory days and post the festive season, how will it shape up?
The total industry stock, and not Maruti specifically, at the beginning of October was 3,30,000 or so. There has been an addition in the stock because the wholesale had been about 4,000-5,000 or higher. The stock in the industry is now roughly 3,35,000-3,36,000 which is about 30 days of inventory and that is the trend which we have observed in Maruti Suzuki also. Going forward, if the retail sales are good in the balanced part of the festive season that is in the next two weeks, we will see a reduction in the inventory. However, it really depends on how the retail moves in the next two weeks.
(What’s moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)
Download The Economic Times News App to get Daily Market Updates & Live Business News.