Maruti Suzuki, the largest carmaker in the country, suffered a 20 per cent dip in its year-on-year bookings in the month of November following the government’s announcement to delegalise the use of old Rs 500 and Rs 1,000 notes on November 8, said RC Bhargava, chairman, Maruti Suzuki India. The company, however, also announced an additional Rs 2,000 crore in its Rohtak R&D centre by 2019, taking its total investment at the centre to Rs 3,800 crore.
While November bookings dipped, Bhargava said that the bookings revived in December and rose by 7 per cent over that in the previous year, thereby suggesting some stabilisation on the currency front.
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“Demonetisation did lead to a dip in new bookings as well as of True Value sales. Bookings in November were 20 per cent lower, but in December it was 7 per cent higher than the last year. This indicates that immediately after demonetisation there was a certain amount of uncertainty and concern and the bookings dropped….Cash availability from banks is much better now,” said Bhargava.
The company, on Friday also announced an additional investment of Rs 2,000 crore in its Rohtak R&D facility by 2019. Bhargava said that the job of the R&D team would be to “produce more Brezza type successes.”
Interacting with reporters he said that True Value sales continued to be lower in December, though the extent of decline had reduced. The continuing decline in used car sales in December is linked to the fact that more buyers of used cars buy it from their own funds rather than going for a bank finance. “Interest rates are couple of per cent higher from True Value car sales and people don’t prefer taking loan for used cars, “ said Bhargava adding that while almost 80 per cent of new cars are financed, only 40 per cent of the used cars are financed by a financial institution.
With uncertainty creeping into the market Bhargava said that he would not like to give a guidance for sales over the next quarter and wait to see how the situation evolves. He however pointed that while the company witnessed a double digit growth till November this fiscal, even in the worst case scenario, the numbers won’t be very different from 10 per cent. “The company is maintaining its production levels as planned and wholesale figures as well,” he said.
Maruti Suzuki, however, has witnessed a sharp revival in rural sales in December after the November slump. “In November, the rural sales were down by 11 per cent but in December they were up by 18 per cent,” Bhargava said.
On Suzuki’s upcoming plant in Gujarat, Bhargava said the manufacturing plant is on schedule and the first car would roll out in February next year and in this financial year around 10,000 cars would be delivered from Gujarat plant. On new product launches, he added the company would be launching Ignis and Baleno RS in the near future.