Maruti Suzuki To Make Cars Affordable With 'Innovative' Finance Schemes
Senior executive Partho Banerjee explained problems with India’s household income and soaring car prices in the country.
Maruti Suzuki India Ltd. is trying its "level best" to attract more customers and encourage them to upgrade to a four-wheeler, despite challenges related to car pricing and the income levels of Indian households, the company’s senior executive officer Partho Banerjee told NDTV Profit on Thursday.
Despite the launch of the new-generation Swift in May and the new Dzire in November, which is among the best-selling compact sedans in India, Maruti Suzuki saw sales decline over the past eight months in the mini and compact car segments.
In December, the leading carmaker saw sales in its mini segment rise 190% and than in compact segment grow 20%.
“Our endeavour is to see how we, as a market leader, are going to revive and renew that (mini and compact) segment. Being the market leader, we are trying our level best to see how we can keep making the customers upgrade to a four-wheeler,” he added.
Banerjee suggested that the drop in sales was due to issues that have emerged in India’s auto industry over the years, but emphasised that his company is working to mitigate these challenges
“With regard to the entry-level cars, the problem is due to the different regulations of the law of the land, the vehicle prices have gone up to the tune of 60% if we compare to the year 2018,” Banerjee said.
“However, at the same time, the monthly household income has not grown to that level. So there is always the problem of affordability,” he added.
To address the problem, Maruti Suzuki is coming up with an array of schemes.
“What we are trying to come up with are different sorts of innovative finance schemes, like the limited editions through which we are trying to see how we can make this car affordable to more and more consumers who want to upgrade from a two-wheeler to a four-wheeler,” the top executive noted.
He explained that to increase four-wheeler penetration in the market, it is important to see how the company gets Indians to upgrade.
“It is very important to understand that car penetration, which is per thousand, is only 32. If we need to go to 44 also, we need to see how we are going to make people upgrade from two-wheeler to four-wheeler,” Banerjee mentioned.
Shares of Maruti Suzuki India Ltd. closed 5.61% higher at 11,837, after touching an intraday high of Rs 11,859.15 apiece on the NSE on Thursday. Meanwhile, the benchmark Nifty 50 closed 1.88% higher at 21,188.65.
