Bhargava: Growth drive
New Delhi, Dec. 24: Buoyed by the growth in sales in rural areas, Maruti Suzuki India is targeting a presence in one-lakh villages by March.
“The industry has seen a decline in sales by about five per cent this year. On the other hand, rural sales — which account for about 30 per cent of our total sales — have grown 18 per cent in the April-November period,” Maruti Suzuki chairman R.C. Bhargava said.
He said the company would have had an even tougher time had it not been for the rural market and “we would have been in a similar mess like the rest of the industry” as demand in urban areas had slowed down by six per cent.
“We have been emphasising on rural markets. Last year, we had covered 44,000 villages and till November this year, we have grown in presence in 60,000 villages and by March next year, we will have presence in one lakh out of a total of 6.51 lakh villages in India,” Bhargava said.
At present, Maruti has a total of 700 rural outlets, which organise workshops that are authorised to carry out repairs under warranty to an extent. In addition, it has 650 mobile vans that have helped in servicing even at the customers’ homes.
Bhargava said the overall market continued to be down because of the economic condition and the political situation. “In terms of retail sales, for the fiscal till November we are one per cent up from that of last year. We are hopeful that we will be able to match last fiscal numbers,” he said.
He said the company would fall short marginally in exports because of the changing policies in some of the key markets such as Sri Lanka and Algeria. “We were aiming 1.2 lakh units of exports this year, which we think, we will fall short of. All overseas markets have uncertainties associated with policies and the economy.”
Bhargava said the company’s Gujarat plant project was currently “in cold storage”. “There is no point in creating additional capacity when there is no demand. We have the land, boundary wall has been erected, but we are not undertaking any capacity creation. We have not decided when we will start work at the Gujarat plant,” Bhargava said.
He said Maruti would wait for the outcome of the general elections next year and watch the steps taken by the new government to boost economic growth and manufacturing.
“We don’t expect anything to happen between now and the elections. We hope the elections will bring something positive for the industry,” he said. Maruti is, however, expecting to break its monthly sales record this month. The company is likely to sell 1.2 lakh units in December, Mayank Pareek, Maruti chief operating officer (marketing and sales), said.
“Apart from discounts, which are about Rs 17,000 on an average, exchange offers and customers advancing purchases ahead of January have lifted December sales,” he said.