Maruti Suzuki forecasts 20percent decline in Sales in Year 2020
Maruti Suzuki forecasts a decline of 20% in sales for the year 2020.
This is because of the drop in sales this year the company faced also the transition from BS-IV to BS-VI emission norms.
In addition to this, Matruti Suzuki will phase out their diesel line up with the BS-VI norms kicking in.
As India is Asia’s third largest auto consumer, a dent in the sales for Suzuki Corporation will be detected.
According to a news channel, we at MyNewCar.in have got to know that Suzuki Motor Corporation has changed the sales forecast for their Indian subsidiary- Maruti Suzuki. This change reflects a whopping slash of 20% in FY20, because the auto manufacturer has just tried to manage to achieve a slight growth of 4%. The first half sales records in India was dismal, which is Asia's third biggest car market.
Forecast for 2019
In accordance with the cumulative sales volumes by the first half of September, Maruti Suzuki faced a 25% drop. Due to this, Suzuki’s global sales were affected and a drop of 17% was detected. According to Suzuki, they are estimating that a mild recovery in sales in the festive month of October will help them to get the sales dropped by 13.2% at the end of the year.
After the first quarter results, the Japanese car manufacturer has cut its revenue by 10.3%, the operating income has been slashed by 39.4% whereas the net income forecast has been dropped down by 30%. According to SMC, by the end of the year, automobile volume and motorcycle volumes is estimated to be 2.84 million and 1.77 million respectively. When we compare these results to the previous year, a drop by 14.7% and 3% is seen accordingly.
Forecast for 2020
Maruti Suzuki India estimates that they will manage to sell upto 1.5 million units in the year 2020. But when we compare these numbers with the target (i.e 2 million for FY20), there is fall by 20%. In an interview with a news channel, R C Bhargava, Chairman, Maruti Suzuki quoted that change from BS-IV to BS-VI compliant norms in the coming four to five months will be very critical to the company and the demand will be very uncertain.
Adding to the RC Bhargava also said that “While the Maruti Suzuki posted growth in wholesale in October, much of the market had seen a decline. So far in the first six months of this financial year, we have registered a decline of 25%, so I don’t expect a major change and forecast of Suzuki on India’s growth to be -20% seems fairly close”.
With this announcement, it can be clearly noted that the auto manufacturers are struggling in the Indian market, even though they faced better performance in this festive season. Here the main concern Maruti Suzuki is facing is that of the mini car segment, which is their main profit making segment. This segment is facing a decline by 53% which is making a dent to the manufacturers pocket.
In addition to this, the Indian manufacturer is phasing out their diesel units owing to the BS-VI norms. Hence this will also bestove additional burden on sales as well in the year 2020.