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Old 1st July 2011, 12:15   #1
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Default Maruti Sales Fall For the First Time Since 2008

Moderator Note : June 2011 sales stats have been posted at this link (June 2011 : Indian Car Sales Figures). Thread closed, please continue the discussion on the new thread.

From Bloomberg News

Quote:
Maruti Falls After Car Sales Drop for First Time Since 2008
By Siddharth Philip
July 1 (Bloomberg) -- Maruti Suzuki India Ltd., India’s
biggest automaker, fell the most in a week in Mumbai trading
after sales declined for the first time since December 2008 as a
strike curbed production.
The New Delhi-based carmaker’s shares fell as much as 2.6
percent, the biggest intraday decline since June 23, and traded
1.8 percent lower at 1,139 rupees as of 11:28 a.m. The benchmark
Sensitive Index was little changed.
Maruti sold 80,298 vehicles in June, compared with 88,091
units a year earlier, according to an e-mailed statement today.
Local sales decreased 3.8 percent to 70,020, while exports fell
33 percent.
Workers ended an 11-day strike at its Manesar plant near
New Delhi on June 17, after the company agreed to take back
dismissed employees. The strike at the factory, which builds as
many as 1,200 cars daily, cost the Indian unit of Suzuki Motor
Corp. $9 million a day, Chairman R.C. Bhargava said on June 8.
The company said in June it may miss its forecast of as
much as 15 percent sales growth in the year that started April
1, as higher interest rates and rising fuel costs hurt demand.
The Reserve Bank of India has raised interest rates 10
times since the start of 2010 to rein in inflation, driving down
demand for cars in a country where 80 percent of all purchases
are funded by loans.
State-owned refiner Indian Oil Corp., the country’s
largest, raised the price of gasoline by 5 rupees a liter to
63.37 rupees ($1.4) in New Delhi in May. That is the biggest
increase since June 2008.
Is this a case for just Maruti's sales or is it the start of an industry-wide slowdown?

Last edited by GTO : 2nd July 2011 at 12:42. Reason: Adding link to June 2011 thread. Lets continue the discussion there
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Old 1st July 2011, 12:25   #2
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Default Re: Maruti Sales Fall For the First Time Since 2008

Reading what you posted it looks more because of the strike than anything else. Also, with increase in interest rates and rising petrol prices the whole sector might slow down a bit.
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Old 1st July 2011, 12:30   #3
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Default Re: Maruti Sales Fall For the First Time Since 2008

Definitely the strike at Maruti's Manesar plant has effected them adversely in this month's sales... more than 13000 units, which is almost equal to 1 month Swift units sold. If the strike had not happened in the first place, I bet the story had been exactly opposite.

IMO, automaker have nothing to fear in Indian scenario till they have good cars at reasonable prices (read VFM), & there is no slowdown of the US type, but definitely things will grow at a slower as compared to F/Yr 2010/11.
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Old 1st July 2011, 12:38   #4
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Red face Re: Maruti Sales Fall For the First Time Since 2008

3 major reason for the fall in sales:
1) Incresing Petrol prices is putting customer on hold
2) Increasing Interest rates is making the purchase more difficult
3) Strike at Maruti plant at wrong time.
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Old 1st July 2011, 12:45   #5
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Default Re: Maruti Sales Fall For the First Time Since 2008

Quote:
Originally Posted by ghodlur View Post
3 major reason for the fall in sales:

3) Strike at Maruti plant at wrong time.

Can there ever be a strike at right time (from the company’s perspective)
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Old 1st July 2011, 12:53   #6
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Unhappy Re: Maruti Sales Fall For the First Time Since 2008

Quote:
Originally Posted by PhiGolden View Post
Can there ever be a strike at right time (from the company’s perspective)
Well it could have been the said when things were going good for the Auto industry and would have not affected the company bottom line. But now when the entire auto industry in India is slowing down due to various reasons, having a strike at a plant is defintiely a wrong timing. Its a hit below the belt.
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Old 1st July 2011, 12:55   #7
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Default Re: Maruti Sales Fall For the First Time Since 2008

Quote:
Originally Posted by PhiGolden View Post
Can there ever be a strike at right time (from the company’s perspective)

^^ Very true, but maybe even from a company's perspective it came at the right time when auto sales are on a decline for the top 2 reasons mentioned above.

Cheers,
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Old 1st July 2011, 12:59   #8
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Default Re: Maruti Sales Fall For the First Time Since 2008

Quote:
Originally Posted by PhiGolden View Post
Can there ever be a strike at right time (from the company’s perspective)
Oh yes. Toyota would have loved it when they had to slash production. It would have meant not having to pay the workers during the time.
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Old 1st July 2011, 13:03   #9
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Default Re: Maruti Sales Fall For the First Time Since 2008

Quote:
Originally Posted by PhiGolden View Post
Can there ever be a strike at right time (from the company’s perspective)
During the annual maintenace shutdown

Maruti will lose another week of production due to it
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Old 1st July 2011, 13:04   #10
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Default Re: Maruti Sales Fall For the First Time Since 2008

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Last edited by GTO : 3rd July 2011 at 20:49.
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Old 1st July 2011, 13:13   #11
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Default Re: Maruti Sales Fall For the First Time Since 2008

Strike or no strike, sales would still have been stagnant or reduced.

I have been doing lots of outings to Maruti dealerships last month and every time I find only me there with absolutely no other prospects around.

Cheers
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Old 1st July 2011, 13:36   #12
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Default Re: Maruti Sales Fall For the First Time Since 2008

Quote:
Originally Posted by lucifer1881 View Post
Oh yes. Toyota would have loved it when they had to slash production. It would have meant not having to pay the workers during the time.
OT.

Did you miss Honda.? One more company that would love it for few reasons listed below.

Tsunami effect,Falling sales,increased competition,no diesel mill, no new launches.
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Old 1st July 2011, 14:01   #13
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Default Re: Maruti Sales Fall For the First Time Since 2008

Reasons for falling sales

1) Maruti's product quality is not as brilliant as used to be. My 10 year old 800 was better build at the end of its 10 year service than what my 2 nd half year old Swift is at the end of 2nd half years.

2) After Sales is not as brilliant as used to be. Yes if you complain to the higher ups or their 1800 180 180 number those guys above are super pro active but most of the service stations are overworked and take the customer for granted and need divine intervention for getting their act right.

3) Competition have way better products than the Maruti Stable, they are still below Maruti because of Maruti's decades of reputation.

If Maruti does not do anything about the above the sales will dwindle further

Will I buy a Maruti again ? Yes my next car is the new shape Swift Diesel unless something on the similar lines with as sharp a handling comes out. Some years back I would have blindly said YES to a maruti product after having owned Maruti's all my life but now I will change my track if the company does not get its act right.
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Old 1st July 2011, 18:13   #14
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Default Re: Maruti Sales Fall For the First Time Since 2008

Quote:
Originally Posted by djpeesh View Post
From Bloomberg News

Is this a case for just Maruti's sales or is it the start of an industry-wide slowdown?
Maruti has for long been synonymous with Petrol powered vehicles in India and still earns a major proportion of its sales through sale of Petrol vehicles. Hence, an increase in Petrol prices and one of biggest strike in history of the company, both coming in single month was bound to affect sales figures.

Also, one must not forget that June-September has traditionally been slow months for auto sales. So, as has been said, This was bad timing....VERY BAD TIMING!

I personally foresee Maruti returning to normal figures soon, most probably this month itself.

OFF TOPIC: BTW, Isn't the newspaper article also written by you, Sid.
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Old 1st July 2011, 18:22   #15
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Default Re: Maruti Sales Fall For the First Time Since 2008

Quote:
Originally Posted by sahakar View Post
Strike or no strike, sales would still have been stagnant or reduced.

I have been doing lots of outings to Maruti dealerships last month and every time I find only me there with absolutely no other prospects around.

Cheers
Hi
On the other hand have seen some of the dealerships busy with prospects looking around and one dealer had a lot of about 12-14 vehicles lined up for delivery. may be I could be wrong too or saw an exception.

Could be that people are getting sales to doorstep with aggressive marketing coming from a mushrooming industry.

Cheers
Prasad
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