Even as most carmakers await an improvement in consumer demand, market leader Maruti Suzuki said on Wednesday it expects record domestic sales in 2014. The company, which had a 47% market share in November 2014, hopes to close the year with 11.48 lakh units sales, though it expressed caution that an increase in excise next year could hurt sales.
Maruti chairman RC Bhargava said, “We are going to see our highest ever sales in a calendar year in 2014. We are going to touch around 11.48 lakh units during the year. Next year, the industry is expected to grow by 5-6% while we expect to grow in double digits.”
Maruti’s previous sales record for a calendar year was in 2010, when it sold 10.6 lakh units.
He added, “(Higher excise duties) could derail the auto industry. If it lapses (on December 31) then prices go up by 4% and we will have to pass on the burden to the customer. If it remains the same then we will continue to pass on the cost benefit.” Excise duty on cars was cut by 4-6% in the Budget.
The company, which has six models in India’s top-10 selling cars list, has seen market share rise to 44.8% in April-November FY15, up 4.1 percentage points YoY. During the period, the company’s total volumes rose 13.1% to 8.35 lakh units.
At present, only three companies — Maruti, Hyundai and Honda — are witnessing steady growth largely on the back of new launches. Most other major players, like Mahindra and Tata Motors, have seen declining sales. After contracting for two years, in April-November FY15, India’s 25-lakh-unit passenger vehicle market grew about 3% to 16.85 lakh units.
RS Kalsi, executive director responsible for domestic sales and marketing, said that while rural markets continued to grow in 2014, urban markets have also returned to the growth path after witnessing stagnation in the last couple of years.
On Wednesday, the company said that it was awaiting a clarity on the The Companies Act (2013) before going ahead with the minority shareholders’ voting on its proposal to let Japanese parent Suzuki Motor Corporation own and invest at the upcoming Gujarat mega production facility. This proposal had initially faced stiff resistance, forcing Maruti to make significant changes to the original plan — the biggest change said that cars sold to Maruti from the plant will be sold at the production cost with no mark-up.
“(The voting) has been postponed. Government is bringing in changes in the Companies Act 2013. It has already been cleared by the Lok Sabha. It may be taken up in the Budget session now. So, till there is clarity on the law it won’t make sense to have the vote now,” Bhargava said.