Maruti car production set to fall

NEW DELHI, MAR 7: Maruti Udyog's production in the current fiscal is expected to be about 15,000-18,000 vehicles lower than previous year...

NEW DELHI, MAR 7: Maruti Udyog’s production in the current fiscal is expected to be about 15,000-18,000 vehicles lower than previous year’s figure of over 3.54 lakh vehicles.

The small-car major produced over 2.99 lakh vehicles in April-February, including 20,000-odd vehicles for exports. In February, the company sold 25,602 vehicles, including 13,766 units of 800cc model and 4,725 Zen cars as against 26,869 vehicles sold in January.

The total production in the 10-month period ended January 1999 was 2,74,200 vehicles, of which 2,68,456 vehicles were sold. The company produced 28,572 vehicles in January. In the previous fiscal, Maruti produced 3,54,336 lakh vehicles, of which 3,53,234 lakh vehicles were sold, including 25,994 vehicles which were exports.

The expected fall in output, coupled with the cut in prices of various vehicles by the company late last year, may take its toll on the company’s bottomline in the current fiscal.

However, the company expects to improve its sale performance in March ascompanies go in for large-scale purchases in the month to take advantage of depreciation norms.

Maruti had declared a 30 per cent dividend for financial year ended March 1998, having earned Rs 977.31 crore as gross profit as against Rs 807.57 crore the previous year. The company recorded a turnover of Rs 8,133.75 crore in 1997-98 as against Rs 7,662.9 crore in 1996-97.

Maruti is not the only company in the automobile sector which has had a drop in sales during this financial year, particularly during the quarter ended December 1998.

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Total production of all passengers cars and utility vehicles in the 10-month period ended January 1999 was 3,13,280 vehicles as compared with 3,33,371 vehicles during the same period in the previous year.

Sales in this category were at 3,25,564 vehicles during April-January 1999 against 3,43,363 vehicles in the same period last year. Total exports during the period also witnessed a drop to 18,954 vehicles against 23,515 in the same period last year.

Maruti also issued astatement in November stating that it was temporarily cutting production since the first week of November due to recession-induced slowdown in demand for vehicles. "Maruti’s overall sales for November are expected to drop 20 per cent over normal levels", said the statement.Company officials had ascribed the decline in sales to a combination of factors, apart from the recessionary trends and requirement of Permanent Acoount Number (PAN) for purchase of cars. In order to boost sales, the company had launched a major marketing and sales promotion exercise late last year.