Maruti Suzuki India Ltd. (MSIL) is a subsidiary of Suzuki Motor Corporation of Japan.
It is engaged in the business of manufacturing and selling motor vehicles, components and spare parts. It is a leading passenger car manufacturer in India. It also facilitates pre-owned car sales, fleet management and car financing. MSIL boasts a vast product portfolio of 16 car models with more than 150 variants. Its product range extends from entry level small cars such as Alto 800 to the luxury sedan Ciaz.
FY18-19 was an arduous year for the domestic passenger vehicle industry. Its growth came down to 2.7 per cent in FY19, which is the lowest growth in the last 5 years. This is because the passive demand environment which prevailed in Q3FY19 wound its way into the fourth quarter as well. The auto industry is set to experience several regulations as we move into FY2020. These include the introduction of the anti-locking braking system (ABS) as well as the implementation of the second phase of safety protocols. The BS-VI regulation, which will be effective from April 1, 2020, will be applicable on registration of vehicles and not on production. This implies that BS-IV specification vehicles cannot be sold from April 1, 2020 and any unsold inventory beyond the said date will be unserviceable. Therefore, this calls for meticulous volume planning. These regulations will result in price rise, which could affect the demand, particularly that of price sensitive entry level cars. Thus, it may so happen that potential customers may prepone the purchase of vehicles in anticipation of price hikes. On the other hand, some customers may have a preference for technologically advanced vehicles, which will leave the pace of buying unaltered. The Society of Indian Automobile Manufacturers (SIAM) expects the automobile industry to grow by 3 to 5 per cent in FY20E. The auto industry will be required to comply with improved safety regulations from October 2019.
Financial and Operating Performance
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May 27, 2019