Maruti is driving slower than last year

NEW DELHI: Maruti Udyog may have posted a robust 25% growth in sales last month, but managing director Jagdish Khattar says these are difficult times and the company has been trying out various ways of keeping its head above the water.

“It will be difficult for the company to equal the growth rate of last fiscal. Interest rates are impacting sales. In June, for example, only 71-72% of our cars were financed against 80% earlier.

And banks are getting more cautious while giving loans. Then, overall market growth is also coming in from new launches, which had no base last year,” Khattar said on Thursday.

Expressing concern over floods in various parts of Maharashtra and Gujarat, he pointed out that most of his car deliveries to the South pass through these two states and sustained floods could become a cause for worry. 

During the June quarter, Maruti logged a sales growth of 17% against the 20% pace seen last fiscal. However, Khattar and his team have been working overtime to beat the current slowdown by increasing penetration in the hinterland through innovative schemes. 

Mayank Pareek, general manager - marketing said, “We have launched two promotional schemes to improve sales. The only way to beat the current slowdown is by increasing product penetration.”

While the ‘Ghar Ghar Mein Maruti’ scheme has targeted panchayats and primary health centre workers in rural areas, ‘Lalkar’ is a sales scheme involving employee referrals.

The former has seen 2,300 cars being sold last month even as Lalkar brought in sales of 1,930 units. Pareek said dealers in rural areas were being encouraged to recruit locals as salespersons for driving Maruti’s rural penetration plans. 

Khattar agreed that these schemes, although good for sales enhancement, mean greater spend on promotional activities. “But, hopefully, things will become better by the time the festival season arrives in September.”