Toyota Kirloskar Motor Private Limited, an Indian arm of Japanese auto maker Toyota Corp, on Wednesday said it expects a 3-4% contraction in its sales during the fourth quarter of the current financial year, largely owing to demonetisation.
Toyota Kirloskar Motor Private Limited (TKM), an Indian arm of Japanese auto maker Toyota Corp, on Wednesday said it expects a 3-4% contraction in its sales during the fourth quarter (January-March 2017) of the current financial year, largely owing to demonetisation. “The fourth quarter will be a challenging as well as tighter for us,” a top company official said.
Despite a decent growth during the first half of the year and an encouraging festive season sales in the third quarter, the company sees stagnation in sales during the current fiscal, T S Jaishankar, deputy managing director, TKM said.
Speaking to the FE at its manufacturing plant at Bidadi, about 35 kms from Bengaluru, Jaishankar said: “Though we end up current quarter (Q3) with a decent 3-4% growth owing to demand for both new Innova Crysta as well Etios due to festive push, we see Q4 to be impacted by the demonetisation. Customers have decided to postpone their purchasing decision due to cash crunch and ensuing Budget, which will be presented on February 1, 2017. GST will also be one of the reasons for customers to defer their purchase plans,” he said.
Car sales will remain flat during the current fiscal, he said adding that the company had seen a reasonably good growth till November this year. “Although we have done reasonably well till November, given the challenging Q4, we expect sales to remain flat overall this year,” Jaishankar said. Last fiscal, Toyota had sold around 160,000 units, he added.
Responding to a query on achieving full capacity of 310,000 units across two plants, Jaishankar said the first plant which makes Innova and Fortunner, is running at full capacity of 1,00,000 units per annum. However, the second plant, which makes Etios, Liva, Etios Cross among other products, is running at 45% of its total capacity of 210,000 units currently. “We are not looking at numbers but aiming at profitable growth with a highest quality in mind,” Jaishankar pointed out.