New Delhi: India’s largest car maker Maruti Suzuki India Ltd on Friday said that it has started to see an uptick in demand for its vehicles after weeks of sluggishness caused by demonetization.
The combined retail sales for Maruti in the festive months of October and November were 6-7% higher than the year-ago period but bookings in November fell drastically, company chairman R.C. Bhargava said.
“They were 20% lower than last year. But in December so far, the bookings are 7% higher than last year,” he added.
Maruti attributed the spike to an improvement in the availability of cash in the market, but said that sales during November and December may impact its growth forecast for the year.
Maruti aims to grow in the lower double digits during the financial year.
Automobile sales in November declined for the first time in 11 months as the government’s decision to ban high-value banknotes depressed demand for commercial vehicles and two-wheelers.
Total sales fell 5.48% during the month, the steepest fall since March 2013, according to data compiled by lobby group Society of Indian Automobile Manufacturers, or Siam. Overall passenger vehicle sales, which include cars, utility vehicles and vans, grew 1.82% to 240,979 units, the slowest since February.
To be sure, Siam reports wholesale figures and the numbers may not reflect the actual impact of the currency ban.
Maruti claims there has been a reversal in trend in December.
The company’s used-car business, which also declined significantly in November, has started to show signs of a recovery.
“They are still low in December. They are also showing an upward trend. The extent of decline is not as much as November,” Bhargava said.
“Overall, it seems to me that the negative impact of the move has reversed. As far as Maruti is concerned, we have no real cause for worry. We are maintaining our production levels as planned,” he added.
Separately, the company said it will invest an additional Rs2,000 crore in its research and development centre in Rohtak.
“We have already set up the test track and crash facilities. Investments till 2016 were Rs1,700 crore, and we are now setting up more facilities for ride handling, braking, NVH (noise, vibration and harshness), engine and emissions. By 2019, we will be putting in another Rs2,000 crore,” C.V. Raman, executive director (engineering) at Maruti, said.