Maruti Suzuki India Ltd. has scaled down its production after its sales fell for the second consecutive month in July, 2011. Maruti Suzuki sold 75,300 vehicles in July this year (2011) as compared to 1,00,857 vehicles sold in July 2010.
The company’s Chairman, Mr. R.C. Bhargava, told the reporters in a briefing in New Delhi on August 12, 2011 that the company would cut down the production of most of its models for July 2011 because of the poor demand. Recent rise in interest rates along with soaring fuel costs have affected the car sales in India. Maruti Suzuki had earlier stated in June, 2011, that it might miss its sales growth target by almost 15 percent for the fiscal year 2011-2012. Mr. Aditya Shekhawat, a Mumbai-based analyst with Khandwala Securities Ltd., opined that sales at Maruti were likely to decline further until there was some clarity on inflation and interest rates.
The company witnessed a decline in its local sales by 26 percent, while its exports declined by 18 percent for the month of July, 2011. According to Maruti, its sales fell because the production of Swift hatchback was curbed before the introduction of a new variant. The company also recently shifted production of its DZire sedan to its factory in Gurgaon from Manesar. The company attributed this as another factor for the decline in its sales for the month of July 2011. Mr. Bhargava said that except the production of the Swift and the Swift DZire, production of all other models will be reduced and the company will manufacture depending on its ability to sell.