Maruti-Suzuki has returned to work normally after confirming it stopped production for one day this weekend at its Gurgaon factory near Delhi in response to falling demand and as consumers feel the impact of rising fuel prices.
The shut-down took place on Saturday (9 March) and followed hard on the heels of Maruti sales falling 8% year-on-year last month as Indian automakers face high interest rates and sluggish demand.
Go deeper with GlobalData
“Maruti-Suzuki is working normally,” a spokesman for the manufacturer told just-auto from India. “The market has slowed down and we did some adjustment of some stock that was required.
“I am sure there is somebody keeping an eye on the market – what happened was only for Saturday.”
Petrol prices in India have been deregulated for some months now and it appears diesel may be moving in the same direction, steadily pushing up the cost of fuel.
“Petrol and diesel were being controlled by the government – now they have lifted the control and they have said the oil companies will decide the price,” All India Trade Union Congress (AITUC), national secretary, Darshan Sachdev, told just-auto from Delhi.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“Naturally, consumers will be less inclined to buy these petrol and diesel cars. Every month these diesel prices are going up by INR1 – this will have a psychological effect on consumers. It is not much to worry about, but immediately, there is a cause of concern.”
Petrol is currently around INR60 (US$1.10) per litre in India, with diesel around INR45 per litre.
“Companies selling it [fuel] can decide the market price themselves and the government will not dictate,” said Sachdev.
“This Saturday, they [Maruti] had a half-day production in the Gurgaon plant, of course they are trying to adjust to market conditions. Temporary fluctuations are always there.”
Despite the short-term worry concerning fuel prices, the AITUC national secretary, nonetheless pointed to the appetite of around 25% of India’s vast 1.3bn population who were possibly able to purchase vehicles.
However, he added the price rises in petrol and diesel would affect operators of India’s enormous network of railways and buses that form so much of the country’s lifeblood.
