Maruti bookings crash by 20% due to Modi Govt’s currency ban
Country's largest carmaker Maruti Suzuki on Friday said bookings declined by 20 per cent in the October-November period, compared to the same period last year, as cash crunch following scrapping of high-value notes led to fall in demand.
The auto major, however, said the situation has improved this month and the bookings have grown by 7 per cent as compared to December last year.
The auto major also announced that it will invest around Rs 3,800 crore in its upcoming R&D centre at Rohtak by March 2019.
"The numbers that we have show that demonetisation did lead to dip in bookings in November. Bookings as well as True Value sales...if we take October-November period than retail sales were still 6-7 per cent higher than last year. But bookings in November certainly fell 20 per cent as compared to last year," Maruti Suzuki India (MSI) Chairman R C Bhargava told reporters.
"So it indicates that immediately after demonetisation took place, certain amount of uncertainty and concern was there among people as what it means, but the trend has changed and from minus 20 per cent last month, the company has seen bookings grow 7 per cent in December," Bhargava added.
On dip in sales from Maruti True Value outlets, Bhargava cited higher interest rates for used cars and shortage of cash as prime reasons.
"Trend is reversing but it is still in the negative territory," he added.
When asked if the company would still stick to its earlier stated double-digit growth guidance for the current fiscal, Bhargava said: "Till November, we were growing in double digits. As I said I am not making a prediction for the next three months but what I can say safely is that in the worst case scenario, I can see that even if things go bad for some reasons we will still be not very different from 10 per cent."
"The only thing which I am not prepared to do at this point is to make a forecast for the next few months. I want to have little bit of evidence as what happens in January before we predict for the whole year," Bhargava said.
The company is maintaining its production levels as planned and wholesale figures as well, he added. When asked about the Suzuki's upcoming plant in Gujarat, Bhargava said the manufacturing plant is on schedule and the first car would roll out from February next year.
On new product launches, he added the company would be launching Ignis and Baleno RS in the near future.
The government on November 8 last month had announced the scrapping of old 500 and 1,000 rupee notes in a bid to clamp down on black money, terror funding and corruption.
MSI Executive Director R&D, C V Raman said the company plans to invest around Rs 3,800 crore on its upcoming R&D centre in Rohtak by March 2019.
The company has already invested around Rs 1,700 crore on the project as of March 2016.