Maruti expecting strong festive demand; has a lot of pending bookings: Shashank Srivastava

However, I am not able to give you a perfect guidance on when exactly it will become 100% because things are still not completely clear. We still go by week to week projections based on the visibility that we get every week. However, having said that, the numbers for August at 329,300 for the industry seems to be pretty good because this is the highest ever August in the history of the Indian auto industry. Also coming on the back of the highest ever wholesale month which was in July, August was the third highest ever and in that sense, we do see a good traction as far as the PV sales are concerned.

Let us talk about the festive season. We have already kickstarted the festive season with Ganesh Chaturthi. What are your expectations in terms of sales for the festive season?
We believe that the festive demand should be strong because we have a lot of pending bookings. While Maruti Suzuki currently has almost 377,000 pending bookings, for the industry there are 700,000 to 750,000 pending bookings. There is one caveat though; the production has to be in line with this underlying demand pattern because model-wise and segment-wise demand is quite different and therefore the production has to adjust accordingly if the industry has to do well.

The second caveat is that the consumer sentiment hopefully will remain strong for a longer time despite the GDP numbers being a little below the expectations.

What is the outlook in terms of the inventory levels for Maruti at present?
For Maruti Suzuki, we started with a very low stock of about four or five days at the beginning of April and now it is roughly around 20 days of stock.

has seen a slew of new launches over the course of the last two odd months – Brezza, Grand as well as Alto. How are the bookings for all of these new launches?
For the new Brezza, we crossed 106,000 bookings yesterday. Grand Vitara is also going quite strong because we have not really announced the prices yet and the sale will start sometime towards the end of September. The number of bookings there is touching 50,000, out of which about 44-45% is the strong hybrid. That is quite positive. Let’s see how the consumers react once we announce the prices and we will see how the trends shape up.

Is there any impact on CNG sales because some reports have highlighted the rise in prices had had an impact on your sales?
The CNG vehicle demand is directly proportional to the gap between the CNG prices and the gasoline fuel prices. When the fuel price difference increases, CNG advantages become even more apparent to the consumers because the running cost is quite low compared with gasoline. And that is one of the main reasons which has been driving the demand for CNG vehicles.

Recently because of the geopolitical situation, we have seen CNG prices going up faster than the gasoline prices and the gap therefore has reduced and logically we should see softening of demand for CNG vehicles. However, at the moment, we still have 1,25,000 pending bookings for CNG vehicles out of the 377000 bookings that are pending with Maruti Suzuki. That is substantial and we have not really seen a big drop.

I have always maintained and I would like to repeat here that once we have increased production of CNG vehicles, we will get to know the real demand pattern. Often the real demand pattern gets hidden when the pending payments are high and therefore we will have to wait for that situation because we are also increasing the production of CNG vehicles with a better component availability that we have now.

Is the company witnessing any concerns in any of the geographies that you cater to with regards to exports?
Actually not yet. I do not see that impact yet because this month, we did about 21,500 exports against 20,600 last month and cumulatively this year we have done about 1,11,000 against 87,000 or so last year. Last year, of course, we were the number one exporter from India for passenger vehicles with 2,38,000 odd vehicles and this year see the numbers remaining similar or slightly higher.

The geographies where we are operating in still have a demand for the lower segment vehicles that includes Latin America as well as the African market. So far, it seems that numbers have remained strong. Of course, we must be careful and watch because in exports the demand comes with a small lag and the real effect will be known once we have the full effect of the inflation hitting those countries where we are exporting.