Maruti Suzuki Adjusts Production Amid Sluggish Demand

Maruti Suzuki India Ltd (MSIL) is “adjusting” its production levels to alleviate dealer inventories because of “slower than expected” demand for passenger vehicles in the Indian market during the first quarter of 2024-25, as indicated by its majority shareholder, Suzuki Motor Corporation (SMC).

Maruti Suzuki Production and Sales Statistics:

SMC reported that Maruti Suzuki’s production rose by 7.4% year-on-year, reaching 496,000 units in the first quarter of 2024-25. However, during the same period, sales only saw a modest increase of 1.2%, totaling 427,000 units.

Industry Concerns Over Stockpiles:

Concerns have escalated regarding the slowdown in car sales across the Indian auto industry, leading to alarming dealer stockpiles. In recent months, the Federation of Automobile Dealers Associations (Fada) has issued two letters to the Society of Indian Automobile Manufacturers (Siam), raising warnings about this situation.

According to Fada, its members currently have approximately 730,000 unsold vehicles, which could cover more than two months of sales. In contrast, the Society of Indian Automobile Manufacturers estimates the unsold units at around 400,000.

Factors Influencing Maruti Suzuki Demand:

SMC conveyed that the Indian market typically experiences a slower start in the first quarter than the rest of the year. However, this year has seen demand lag behind expectations, primarily due to the upcoming Lok Sabha elections and adverse weather conditions, including heavy rains and heat waves.

As inventory levels have soared, SMC is making necessary adjustments. The company noted that the festival season will commence in late August, slightly earlier than the previous year, and anticipates that higher demand during this period will increase overall volume.

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