Automobile manufacturer Maruti Suzuki India (MSI) Ltd showed slowdown blues and cut its production by 25.15 percent. Since May 19 the production cut cycle has continued. This is the 6th consecutive month in which the company has taken production cut.
Production cut by 18% in May and still continues
On 8th June, MSI made a public announcement regarding its production in May 2019. The company manufactured overall 1,51,188 units in May 2019. This represents declination in production of units by 18% over production in May 2018. The company recorded an overall production of 1,84,612 units in May 2018.
Except for the light commercial vehicle segment, all the other segments faced production cut. MSI manufactured 3,093 units of Super Carry in May 2019. The light commercial vehicle segment witnessed 50% growth in the production in May 2019 against May 2018.
MSI slashed the production of its mini segment vehicles by 42% in comparison with May 2018. Mini segment vehicles are Alto and Old WagonR. The company produced 23,874 units of mini segment vehicles.
The reduction in the production of its compact segment vehicles is 9.5% against May 2018. The company manufactured 84,705 units of compact segment vehicles. Compact segment vehicles are New WagonR, Celerio, Ignis, Swift, Baleno, OEM Model, and Dzire.
The MSI dropped production of mid-size segment vehicles by 25.7%. The company produced 3,834 units of Ciaz in May 2019.
The company inched down production utility segment vehicles by 3.2% in comparison with May 2018. Utility segment vehicles of MSI includes Gypsy, Vitara Brezza, Ertiga, and S-Cross. In May 2019, the company manufactured 24,748 units of utility segment vehicles.
Decline in Sales
Maruti Suzuki India witnessed a slump of 22% in the sale in May 2019. The company sold overall 1,34,641 units in May 2019 against 1,72,512 units sold in May 2018. This is the second consecutive month in which sales declined. In April, the company’s sales witnessed a decrease of 19%. MSI sold 1,33,704 units in April 2019 against 1,64,978 units in April 2018.
The car sale plummeted more than half in the past 2 years due to high fuel prices, low availability of funds and escalating acquisition costs. urban customers prefer shared mobility and rental based cars rather than acquiring a new one. These services were preferred by the customers due to the problems such as traffic congestion, rising commute times and hassle in parking, customers have started to show a unanimous preference towards public transport and ubiquity of cab-hailing and ride-pooling options, resulting in people preventing to opt for buying cars, mainly in metro cities. The slowdown in the sales has forced the automobile manufacturer to adjust their production schedules to market demand.
Maruti Suzuki India Ltd has a market capitalization of Rs. 2,10,250.74 crores. On 10th June 2019, the shares of the company closed at Rs. 6,960.1 against the previous close of Rs. 6,947.60.