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Business News » Companies News

Demand for new car launches pushes Maruti Suzuki's wait period beyond 16 weeks

New car launches such as Baleno, the new Dzire and Vitara Brezza have a wait period of 16-20 weeks due to the surge in demand.

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Demand for new car launches pushes Maruti Suzuki's wait period beyond 16 weeks
Maruti Suzuki Vitara Brezza. Photo: IANS
Written By: Collin Furtado
Updated: Fri, Jul 28, 2017
01:30 pm
Mumbai, ZeeBiz WebDesk
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Key highlights:
  • New launches have seen a surge in demand resulting in a wait period of 16-20 weeks
  • Baleno, new D’zire and Brezza have a waiting period of 16 weeks
  • Maruti Suzuki's revenues grew by 17.4% in Q1 to Rs 17,550 crore

Even as introduction of Goods and Services Tax (GST) impacted car sales and results of automobile companies like Maruti Suzuki, the strong 'waiting period' is a sign of hope for the company. 

The success of the new launches such as the Ignis, Vitara Brezza, new Dzire and Baleno has helped push the company's sales as the company posted a robust 14.3% growth in domestic sales as it sold 3.67 lakh vehicles during the quarter from 3.22 lakh vehicles in the same quarter last year.

Maruti Suzuki's key strategy to tackle competition and gain outperformance has been due to new launches at regular interval, said the company's management in a conference call with analysts.

This was seen as all the new launches have seen a surge in demand resulting in a wait period of 16-20 weeks. “Baleno, new D’zire and Brezza have a waiting period of 16 weeks, 16 weeks and 20 weeks respectively at present,” said a Karvy Stock Broking report.

This, it said, would help it at gaining market shares going ahead.

Besides these new launches, Maruti Suzuki has plans to launch the new Swift in the second half of FY18. This would help it hold a strong position in the domestic passenger vehicles space.

The Swift already sells over 12,000-14,000 units a month and the introduction of the new model of the Swift could drive these number even further.

This could help the company achieve its targeted double-digit growth for FY18. The company is also putting in efforts to meet the growing demand, despite capacity constraints.

Maruti Suzuki's management in the conference call indicated the possible de-bottle necking to increase the production beyond 10% growth in FY18, though it refrained from giving any specific growth number. It witnessed sizable improvement in first time buyers.

The company is ramping up the production in its Gujarat plant to full capacity in the second half of FY18 for the first assembly line and the second assembly line commencement is planned in 2019.

Maruti Suzuki's revenues grew by 17.4% in Q1 to Rs 17,550 crore. However, its net profit took a hit as it was up 4.4% due to GST.

Higher depreciation of Rs 680 crore (up 7.2% YoY) and higher tax rate of 32.3% restricted the growth in net profit during the quarter, said analyst Mitul Shah in a Karvy Stock Broking report.

ALSO READ:
  • Exports remain a sore point for Maruti Suzuki in Q1
  • Maruti Suzuki profit disappoints on costs, tax hit
  • Maruti Suzuki first-quarter profit up 4.4 percent, misses estimates

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TAGS:
Maruti Suzukinew car launchesMaruti Suzuki wait periodMaruti Suzuki net profitQ1 FY18net profitMaruti Suzuki revenuesnew DzireBrezzaBalenoAuto
RELATED NEWS
Exports remain a sore point for Maruti Suzuki in Q1 Exports remain a sore point for Maruti Suzuki in Q1
Maruti Suzuki profit disappoints on costs, tax hit Maruti Suzuki profit disappoints on costs, tax hit
Maruti Suzuki first-quarter profit up 4.4 percent, misses estimates Maruti Suzuki first-quarter profit up 4.4 percent, misses estimates
Seven out of top 10 cars sold in June were Maruti Suzukis; see list Seven out of top 10 cars sold in June were Maruti Suzukis; see list
GST effect: Maruti, Audi, JLR reduce prices of various models GST effect: Maruti, Audi, JLR reduce prices of various models

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