Maruti cuts production by 25% in March

GTO · 19th March 2019, 12:12

Dealer margins up by 3,000...even on best-sellers like the Swift & Dzire - link to news

Quote:

Margins have been increased by ₹3,000 per vehicle on Maruti’s Dzire (a compact sedan), Swift (a hatchback) and Vitara Brezza (a compact sport utility vehicle), said three people with direct knowledge of the development.

The step by Maruti Suzuki took effect in January and is expected to offer additional liquidity to dealerships at a time when demand has dropped. The dealers are also facing a credit squeeze after the crisis at Infrastructure Leasing and Financial Services Ltd (IL&FS) triggered a liquidity crunch in India’s banking system.

longhorn · 19th March 2019, 12:12

Posting a couple of links.

First link says that growth in the sales of new vehicles is likely to be at a 5 year low in 2019. If Maruti have cut production by 25% in what is normally a high sale month (depreciation benefits), I would tend to believe this article.

https://economictimes.indiatimes.com...w/68473626.cms

The second link is more to do with the rosy picture being painted of the economy. This is the opinion, not of laymen, but that of a collective of more than 100 economists. Hence even data coming from statistical organisations need to be taken with a pinch of salt.

https://www.businessinsider.in/108-e...w/68420732.cms

skumar · 19th March 2019, 13:50

Maruti Suzuki's slump a bummer for investors; brokerages lose confidence
Mandatory long-term third-party insurance and increasing acquisition costs on new safety norms and stricter Bharat Stage VI emission norms also plagued the stock performance.

https://www.moneycontrol.com/news/bu...t-3659591.html

avishar · 19th March 2019, 18:54

The cut in production is just to manage inventory levels.

This is the effects of the liquidity crisis which we faced in the third quarter, the lag from which is showing its effects now. Lending by NBFCs were hit hard about the IL&FS disaster and overall bank loan cleanup.

This along with upcoming pollution norms and elections has created a perfect storm for the market. Therefore, I believe auto-sales will be stronger in the later part of the year.

There is nothing fundamentally wrong with the economy, and credit growth has picked up. That combined with further rate cuts will spur even more public consumption and infusion of liquidity. Inflation is quite low, there is expected to me no wild swings in the oil price, ruppee is getting stronger, government is expected to hit fiscal deficit to probably will not need to borrow much from RBI, foreign inflows are decent, government disinvestment and bankruptcy resolution is going at a fair pace.

19th March 2019, 12:12	#17
longhorn Senior - BHPian Join Date: Nov 2009 Location: Chennai Posts: 1,526 Thanked: 1,568 Times View My Garage	Re: Maruti cuts production by 25% in March Posting a couple of links. First link says that growth in the sales of new vehicles is likely to be at a 5 year low in 2019. If Maruti have cut production by 25% in what is normally a high sale month (depreciation benefits), I would tend to believe this article. https://economictimes.indiatimes.com...w/68473626.cms The second link is more to do with the rosy picture being painted of the economy. This is the opinion, not of laymen, but that of a collective of more than 100 economists. Hence even data coming from statistical organisations need to be taken with a pinch of salt. https://www.businessinsider.in/108-e...w/68420732.cms Last edited by longhorn : 19th March 2019 at 12:15.
	(1) Thanks

19th March 2019, 13:50	#18
skumar BHPian Join Date: Nov 2007 Location: BANGALORE Posts: 84 Thanked: 43 Times	Re: Maruti cuts production by 25% in March Maruti Suzuki's slump a bummer for investors; brokerages lose confidence Mandatory long-term third-party insurance and increasing acquisition costs on new safety norms and stricter Bharat Stage VI emission norms also plagued the stock performance. https://www.moneycontrol.com/news/bu...t-3659591.html
	() Thanks

19th March 2019, 18:54	#19
avishar Senior - BHPian Join Date: Oct 2008 Location: kolkata/bangalore,india Posts: 2,901 Thanked: 4,144 Times	Re: Maruti cuts production by 25% in March The cut in production is just to manage inventory levels. This is the effects of the liquidity crisis which we faced in the third quarter, the lag from which is showing its effects now. Lending by NBFCs were hit hard about the IL&FS disaster and overall bank loan cleanup. This along with upcoming pollution norms and elections has created a perfect storm for the market. Therefore, I believe auto-sales will be stronger in the later part of the year. There is nothing fundamentally wrong with the economy, and credit growth has picked up. That combined with further rate cuts will spur even more public consumption and infusion of liquidity. Inflation is quite low, there is expected to me no wild swings in the oil price, ruppee is getting stronger, government is expected to hit fiscal deficit to probably will not need to borrow much from RBI, foreign inflows are decent, government disinvestment and bankruptcy resolution is going at a fair pace.
	(1) Thanks