Bullish on long-term growth story of domestic auto industry despite hiccups: MSI

New Delhi: The country's largest carmaker Maruti Suzuki India (MSI) remains bullish on the long-term growth prospects of the domestic automobile industry despite challenges in the short-term, a senior company official has said.

The auto major, which has close to 50 per cent market share in the domestic passenger vehicle segment, noted that there remained a close connection between the state of economy and demand for automobiles.

"If you look at the demand (for automobiles) in the long term, then obviously it depends upon the basic fundamentals of the economy. We have done a study. In the last 25-30 years, the demand has been very closely co-related with the GDP and per capita income growth," MSI Executive Director (Sales and Marketing) Shashank Srivastava said.

So, the long-term outlook in the segment will depend on the economic growth, he added.

"In the long term, we estimate that the market would continue to be very strong as economy in the long run will be positive. We all are bullish about the growth. But in the short term, we are finding it difficult to predict," Srivastava noted.

When asked by when the company would reach pre-COVID-19 level in terms of sales and production, Srivastava said there is still a long way to go to reach normal figures.

July sales were similar to same month last year, while August sales were almost 20 per cent better than corresponding month of last year in terms of offtakes, he said.

"But we do not want to read too much into this data. It is true that month on month there has been progress but the thing is that last year the base was very low," he added.

Srivastava further said: "We are way away from the normal volumes even though when compared with last August or last July the people have been saying that sales have been better. There is no doubt that there has been a bounce back and this has positively surprised us. However, we must remember we are way off from our normal volumes." Comparison with last year figures would be misleading, he said adding that recovery is there but the company would not like to compare it.

Srivastava said it was getting difficult to predict when the company would be able ro achieve normal volumes.