India's largest automaker said recovery in the automobile sector is still “sketchy” and will largely depend on the performance of the economy.
“We'll have to wait and watch how the economy bounces back,” Shashank Srivastava, executive director at Maruti Suzuki (India) Ltd., told BloombergQuint in an interview. “There seems to be little bit of that (sketchy demand momentum).”
Srivastava said while the industry has shown some signs of recovery fuelled by pent-up demand, it's way off from where it used to be, referring to the demand levels seen in 2018-19. “We are still 33-34% off of those volumes.”
Passenger vehicle sales in India rose ahead of the festive season last year as automakers ramped up factory-gate shipments to cater to demand during Navaratri, Dussehra and Diwali. That came after a lockdown imposed in March following the Covid-19 pandemic resulted in a complete washout for companies.
While the industry grew by 12.9%, during 2005-10 and 5.9% between 2010 and 2015, it only grew by 1.9% in the five years through 2020, he said.
As far as wholesale outlook is concerned, Srivastava said there's room for increased inventory levels at dealerships due to low stock levels.
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