Maruti Suzuki India finally overcomes April sales blues

Low base effect, better economic environment and higher shipment needs have translated into a good April for Maruti Suzuki India, the country's No. 1 car maker by volume. After seeing dull Aprils in the last two years, the company has finally grown substantially this time.

In April 2013, its y-o-y growth was 0.3 per cent. And in April 2014, volumes actually fell 12.6 per cent. This April, Maruti shipped 1,00,709 cars, a growth of 27.3 per cent from April 2014.

These numbers refer to shipments to dealers and not sales at car showrooms. And the numbers refer to shipments of passenger vehicles, which comprise cars, utility vehicles like SUVs and vans.

One reason for Maruti's high growth rate this April is the fact that it sold a mere 79,119 units in April 2014, compared with 90,523 cars in April 2013. Apart from the base effect, its number of outlets has increased from 1,300 to 1,500 compared to two years ago, a Maruti spokesperson told Business Today. So, more cars need to be shipped to maintain inventory.

While that may be so, the huge 35.9 per cent growth registered by Maruti's entry-level cars Alto and WagonR, continues to underline its core strength, and the fact that India is still buying small, not-so-premium cars in large numbers.

April 2014 was bad for the industry as a who because there was ample stress in the economic ecosystem, and people were not buying enough cars to drive growth. Overall industry sales had fallen 6 per cent in the year ended March 2014, and April 2014 saw industry growth fall by 9.5 per cent. This April's overall industry numbers are not known yet.

With the economy showing signs of recovery, especially after the new government taking charge last May, car makers will hope for high growth to return. Already, the year ended March 2015 has seen industry return to growth ways, clocking 3.9 per cent growth.

One swallow doesn't make a summer. Yet, it's a positive beginning.