Maruti Suzuki upbeat on double-digit growth in FY17; aims to buck industry trend again

Sunanda Jayaseelan | Updated on January 20, 2018

RANDHIR SINGH KALSI, Executive Director, Maruti Suzuki India

New technologies, superior design led to better products, says Executive Director Randhir Kalsi

Maruti Suzuki posted a 16-per-cent rise in sales in March, the steepest since October 2015. Maruti’s export rose 33 per cent amid a global slowdown in trade. Speaking to Bloomberg TV India, Randhir Singh Kalsi, Executive Director, Maruti Suzuki India, says the company’s multi-pronged approach – creating disruption through technologies, innovation and new distribution formats – are paying dividend. These initiatives helped the company achieve 11.5 per cent sales growth in FY16, he said. Excerpts:

How does the passenger vehicle demand look like?

We have closed the fiscal year on an all-time high figure and market share, if we talk about the last seven years. We could achieve this with many activities throughout the year, and could defy the industry trend. Moving forward, we are optimistic about FY17, and will certainly continue to maintain the growth momentum.

Talking about the demand, is it broad-based for the industry as a whole?

Talking about the industry; it has been an average year and there were uncertainties in the beginning — untimely monsoon and subsequently a shortage of monsoon in major parts of the country, and government policies that created disturbances in the industry. We approached the market from a different angle, and our focus was to create disruption through our technologies, innovation and new distribution formats. All these initiatives paid dividend, and we could thus achieve the 11.5-per-cent growth for FY16.

How does the next year look like?

Our expectation is that the industry will continue to grow at more or less the same pace, say about 7-8 per cent. But our endeavour would be to beat the industry trend again, and achieve double-digit growth.

In the last few months, we have seen the imposition of additional taxes like the announcement of infrastructure cess, in the Budget. We have also seen additional taxes in States like Maharashtra. What has been the impact?

Our market is highly price-sensitive. So, any increase in prices for whatever reason certainly puts a pressure on demand.

March may not be the right month to see the impact of any kind of increase in prices, because most of the dealers had stocked up before the new tax was applicable.

So, sales for most of the time in March were at old prices only. Moving forward, the customer will feel the impact of this price increase. We expect that certainly it will impact the sentiment.

We have seen a slew of launches by Maruti in FY16. What is the current year looking like? Where do you see the demand coming from – is it going to be via distribution or new product launches?

Sales is dependent on a number of factors, and initiatives we have taken. The first is the product itself – we launched three products during FY16 and moving forward, these products will be available during the full fiscal year. Apart from this, we intend to launch two new products around the festival season. So, that is on the product front.

We have the confidence that we have provided disruptive technology and innovation, and also superior design, hence fulfilling the customers aspirations and demand. I can say with confidence that all these models have been well accepted by the customers.

The models have been successful, considering the fact that 23 new models were launched by all the OEMs put together, and not many of them achieved success.

We worked on various formats of distribution – we have urban showrooms, emerging outlets in Tier-II and Tier-III cities, rural outlets, and the fourth format we introduced for creating a world-class experience for new age customers, is the Nexa channel.

Today, we have 125 Nexa showrooms in place. All these factors put together, we are confident of continuing with a double-digit growth.

Published on April 04, 2016

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