INDIA: Maruti Suzuki expects 6% sales growth; rules out price hike
Maruti Suzuki expects sales growth of up to 6% in the current financial year to 31 March and has ruled out price hikes in the near term.
Chairman R C Bhargava told PTI, "We think that this [fiscal] year Maruti will grow by about 5.5 to 6%... I don't see price hike taking place [in the coming months]."
Bhargava said fuel prices were mainly responsible for the rising costs of owning a car.
He added, "This year continues to be difficult for the sector. Next year, probably, the growth will be flat."
Car loan rates offered by private banks have declined 2% since October but even this has not encouraged sales. Growth will not improve significantly unless the budget supports investment sentiment and will also depend on the election result of 2014, according to Bhargava.
On budget expectations, he said, "We are not in favour of sops but complete measures like GST (goods and services tax) that will create a lot of good sentiments... We don't really get growth from sops because it will temporarily boost sales. But it cannot give long term industrial growth."
On labour troubles facing the automotive sector, Bhargava said, "If the economy and demand continues to be stagnant and industry finds it difficult to meet, it could give rise to more labour troubles. But if the economy picks up again, people will start getting jobs."
He also said Maruti Suzuki was evaluating the market in light of diesel price deregulation. "We are taking a judgement on what will be share of diesel and petrol vehicles. We are taking a judgement on what will be the relative demand of petrol cars. If the policy of the government continues for diesel prices to go up to the market level we are fine."