Maruti Suzuki India Ltd. reported a 25% fall in monthly sales in July 2011 compared to July 2010, a decrease from 1,00,857 units to 75,300 units. Even the company’s bread and butter model, Maruti 800’s sales fell by 16 percent to 38,028 units as compared to the 45,068 units sold in July 2010. According to a Maruti spokesman, this was the biggest drop in monthly sales since December 1983 after the commencement of operation at the local unit of Suzuki Motor Corp.
Maruti’s sales in July 2011 took a hit owing to the shifting of manufacturing activities of Swift Dzire from Manesar to Gurgaon. The despatch of the old Swift has been also been discontinued since July 2011 due to the expected launch of the new model of the Swift in mid-August 2011. These factors contributed to the negative impact to monthly sales by around 17,000 units compared to July 2010.
Moreover, rising loan rates and skyrocketing fuel prices have forced the customers into postponing new purchases. The Reserve Bank of India, in July 2011, raised its lending rate from 7.5%to 8% in an attempt to control high inflation, leading to increased financing costs for new car buyers.