Wednesday, November 02, 2011
By Pranjal Gera
Maruti Suzuki registers a collapse in car sales for October month
Maruti Suzuki, the No.1 passenger car producer, received a severe blow as the sales figures in the previous month of October were less than half in comparison to the 2010 sales volumes in the same month.
Maruti Suzuki was having a trouble time since last two months due to repeated standoffs by its workforce at its Manesar manufacturing production unit. The strike had resulted in a loss of 80,000 units and an estimated financial loss of 500 million US dollars. Apart from these losses, the firm also had to face the reduction in market share from more than 50% in 2010 to 40% this year.
Due to increase in the raw material costs along with rise in fuel prices and higher interest rates, a downfall was observed in car sales. The automobile sales in India revolves around rapidly increasing middle class car buyers and as a result, about three fourth of the cars are funded by banks and other financial bodies.
The auto market felt the heat of inflation in July month, which continued to floor in August and September months.
In the October month the strike at Manesar unit began, after the launch of renovated Swift hatchback; the most booming car model in Maruti’s lineup, and hit the manufacturing during the festive occasion.
Maruti Suzuki India made sales of 55,595 vehicles in October month a downfall of 53.2% as compared to the same month in 2010. In a single month Maruti made a loss of around 40,000 units.
Home-based auto majors Tata Motors and Mahindra & Mahindra took the advantage of Maruti’s circumstances with Tata strengthening its market stake to 16.4% from 15% in 2010, and an increase in sales volumes by 22% in September month this year.
Currently the deadlock at Manesar has ended and production has commenced in full swing in order to cater the booking orders of Maruti car models.