Rahul Bharti, Executive Director, Corporate Affairs, Maruti Suzuki India, says “we are facing structural headwinds in the small car segment. That segment is challenged by affordability. The cost has gone up. Some entry level cars have been discontinued and so the entry price point has now shifted from Rs 250,000 to Rs 400,000 and we believe that not much can be done about the cost, but when income in that segment in the population of India catches up with th ..
First of all, let’s touch upon the margin figure of the company, which has been better than what the Street was expecting at 11.7%. But that is a little low versus Q2 of FY24. We understand the reasons that there were discounts, volumes were down because of the plant shut down, but going ahead in Q4 are we in for some improvement in the margin figure?
Rahul Bharti: Let me talk about the margin drivers. Cyclically both Q2 and Q4 are quarters where wholesale exceeds retail. In Q3, the retail is lower because we want to maintain very low year-end inventories, so going forward yes, the quarter four wholesale should be much better than retail. We had a minor price increase of about 0.45% weighted average that should help. There is some benefit accruing on account of commodities like platinum, palladium, rhodium. Of course, there i ..
This time the quarterly sales for CNG were at a record high level. What are you pencilling in for Q4, in terms of the percentage contribution of CNG in the overall portfolio and what is the outlook for FY25?
Rahul Bharti: We have achieved an all-time high penetration of above 30% in our CNG sales and we expect it to continue. We hope that the CNG prices do not rise much because there is some concern on the APM. The APM price is fixed, but the quantities are gradually getting limited. If that is not a risk, then CNG volume should continue. It is an excellent fuel for both CO2 reduction and customer economics and we hope to increase our penetration in the future.
I wanted to understand the current waiting periods for some of the launches that you have done in the last couple of years because the last whole year we have been talking about the kind of waiting period that the customers had to suffer with. But as of now, what is the average waiting period for some of your recent launches from the likes of Jimny, Grand Vitara, Brezza?
Rahul Bharti: Thankfully, the semiconductor crisis which was a major reason for constraint has gone. At least for now, we do not foresee such a challenge. Our waiting periods are quite manageable, so customers do not have to wait much. Only in CNG models we have a bit of a constraint which should go away with some time. So, models are fairly accessible for our customers. They would not have to wait for long.
But one of the companies that collaborated with Maruti Suzuki as well as Suzuki Motorcorp is Toyota and Toyota globally is facing some bit of a challenges in terms of the testing certification trouble wherein for India they have said that Toyota Innova Crysta, Fortuner and some of the models have been kept on hold. But since you have a rebadging tie-up with Toyota, any impact on this particular tie-up or any impact on the sales that the company is pencilling in?
Rahul Bharti: We have a very fantastic story in exports unfolding. We did about 270,000 and every year we hope to keep beating the past record. This quarter saw the highest ever exports of 71,785 cars. By the turn of the decade, we hope to do about 750,000 to 800,000 exports.
There are some markets which are getting very exciting. For example, Africa and within that, South Africa. The Middle East has grown phenomenally in the past few months because of increased tourism. The Government of India is also helping through some FTAs. We have an FTA with the UAE. Another one is being discussed with GCC six countries, so that will help and more products in more geographies with more distribution intensity will help our exports.
Today about 42% of India's exports are from Maruti Suzuki and the best part is that our first EV we will be exporting to Europe and Japan. Till now, EVs were a topic of imports. We will be able to shift the topic to exports when it comes to EVs and to advanced markets like Europe and Japan this year itself, this calendar year.
Wanted to touch upon the small car segment recovery as well. Since you are sounding positive on the volume front, how are you seeing the next couple of quarters that is Q4 of FY24 and Q1, the first half of this calendar year panning out in terms of the recovery in the small car segment as well as the SUV market share, what are the growth projections there?
Rahul Bharti: So, you are right, we are facing structural headwinds in the small car segment. That segment is challenged by affordability. The cost has gone up. Some entry level cars have been discontinued and so the entry price point has now shifted from Rs 250,000 to Rs 400,000 and we believe that not much can be done about the cost, but when income in that segment in the population of India catches up with the higher cost, the small car segment may come back with increased vo ..
Source Name : Economic Times