Maruti sees 21.3% growth in August, wholesale dispatches cross 1 lakh for first time since February

KEY HIGHLIGHTS

• Maruti registers 21.3 percent growth in sale of passenger vehicles in August 2020, the highest rate of growth in a month since June 2018.

• Overall dispatch figures cross 1 lakh mark for the first time in post lockdown era. Entry level segment records biggest increase in sales at nearly 95%

• The growth however is on the small base of August 2019 when sales had declined by 36%

• Robust demand from rural markets and shift from public transport to private car usage are the main factors for recovery in sales.

India's largest carmaker Maruti Suzuki India Ltd has reported a 21.3 percent growth in sales in August 2020 over the previous year signalling the rebound in demand in the domestic automobile industry is gaining momentum.

The company dispatched a total of 113,033 units from its factory to dealerships last month against 93,173 units in August 2019. Overall domestic sales that includes its small commercial vehicle-Super Carry van and the Toyota Glanza hatchback, was higher by 20.2 percent at 116,704 units. Exports saw a 15.3 percent decline at 7,920 units which brought down the growth of its overall sales during the month to 17.1 percent at 124,624 units.

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This is however the first month since the post lockdown era in March that Maruti has been able to dispatch more than 100,000 units in a month. The numbers however look better than they actually are. Following a 36 percent contraction in sales in August 2019 over 2018, the base was low last year which makes the headline figure of over 20 percent growth a tad misleading. In absolute volumes terms also the figure is lower than in February 2020 when it had dispatched 133,702 units.

Yet, the return to growth would inspire confidence after the company had registered its worst ever quarter in history in the first quarter of this fiscal. Maruti had posted an 81 percent drop in sales in Q1 at just 76,599 units, which in turn consigned its first quarterly financial loss of Rs 249 crore. In line with its performance, India's overall economy also registered a steep 23.9 percent contraction during the quarter, the worst ever in 24 years.

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The biggest jump in sales for the company last month came in the entry level mini segment (Alto and D Presso) that registered a near 95 percent growth at 19,709 units followed by compact cars, its most voluminous segment that comprises bulk of its products like Swift, Dzire, Wagon R, Celerio, Ignis and Baleno, which saw a 14.2 percent growth at 61,956 units. Utility vehicles (Ertiga, S Cross, Brezza) were next with a 13.5 percent growth at 21,030 units.