Maruti Suzuki Q4 Sales Show This Divergent Trend

The Federation of Automobile Dealers Association released retail automobile sales figure for March and FY24 on Monday. Maruti Suzuki India Ltd.'s fourth quarter sales rose but showed a curious trend: inventory of more than 1.5 lakh units remained unsold with dealers during the period.

Passenger Vehicle

Sales of passenger vehicles increased 10% year-on-year in FY24, with 5-10% growth seen across segments, according to FADA data. Three-wheelers saw a massive jump in sales at 49%, albeit on a lower base.

The segment saw a 2% month-on-month and a 6% YoY sales decline for March 2024, attributed to heavy discounting and selective financing. But inventory has gone down from roughly 60 days to 45 days for the industry, said FADA President Manish Raj Singhania.

Within players, Tata Motors Ltd. and Mahindra & Mahindra Ltd. saw sales growth. However, sales of Maruti Suzuki and Hyundai Motor Co. fell.

For Maruti, specifically, wholesale and retail sales showed divergent trends.

Maruti's Wholesale-Retail Mismatch

Maruti Suzuki's wholesales figures jumped 13% to 5,84,031 in Q4 FY24, compared to 5,14,927 in the same period last year. However, the company's retail sales only stood at 4,30,778 units, as per FADA data. This means 1,53,253 units remain unsold with dealers.

Inventory stood at 45,000 units at the end of the October-December period, the management had said in the Q3 concall.

The current inventory levels of over 1.5 lakh is higher than that seen in the same period last year, which stood at 1,03,744 units.

Festive Period Delay

One of the reasons for this difference could be a delayed festive season, which usually sees uptick in automobile sales. This could also mean that year-end figures could be inflated both on the retail and wholesale side.

“While March figures showed a slight dip, its not because the market was bad, last year in March Navratas fell. This year the Navratas start on April 9 and consumers like to buy vehicles on Muhurat days," said Singhania.

The festivals could bring much-needed push for all automakers, including Maruti.

Going Forward

Maruti's market share has stayed at 42% in fiscal 2024, same as last year's, on the back of strong SUV sales, which grew 57%.

The small car segment sales have fallen over the past two years. Maruti's share in the Rs 4 lakh-Rs 7 lakh price range (hatchback and micro SUVs) is down from 67% in FY21 to 58% in FY24 year-to-date and 54% in Q3 FY24, Macquarie said in a Feb. 22 report. The segment remains a monitorable.

Apart from this, the start of the festive season could help boost sales of the carmaker in the new fiscal.