Maruti Suzuki India, which closed FY2023 with a little less than two million unit sales, hopes to cross the milestone figure in FY2024. The largest auto company posted 1.9 million sales in FY 2023.

“We hopefully will cross the two million mark this financial year. We hope to grow at a pace higher than the auto industry this year,” said Shashank Srivastava, senior executive officer, sales and marketing, Maruti Suzuki, while speaking to The Telegraph on the media drive event of its upcoming SUV Fronx.

The auto industry is projected to touch the four million sales mark in the next financial year after closing FY23 at 3.8 million. Projections for next year are between 4.5 million and 4.1 million with a growth of 5-7 per cent.

“If the industry grows at 5 per cent in FY24, we will grow at about 6 per cent or so. If the industry grows at 7 per cent, we should be growing at 8 per cent,” said Srivastava.

With a 6 per cent projected growth over its 1.9 million sales, Maruti is poised to cross the 2 million sales. An 8 per cent projected growth would mean Maruti will post a 2.12 million sales in FY 24.

The company missed out on achieving the two million annual sales target last year as its production was hampered by supply chain issues. The company still has an order bank of 380,000 at the end of March 2023.

“We will hopefully touch the two million mark at the end of FY24. However, there are certain red flags. The rise in repo rate from May 4 last year from 180 basis points to 250 basis points has had a direct impact on auto retail finance as 80 per cent of auto sales is through finance,” said Srivastava.

He also talked of the overall economic growth that has a direct impact on auto sales. “Economic growth is closely correlated to auto demand. While the economy is predicted to grow at 6.5 per cent, there is a downward bias of 6-6.5 per cent,” said Srivastava.

He also highlighted the geo-political issues and its domino effect on fuel prices and commodity prices that could again dampen demand.

Regulatory norms like the BS VI Phase 2 norms have caused an increase in prices of vehicles. Maruti has already announced an increase of 0.8 per cent in prices from April 1.

The marketing head said that rural sales has grown to 44.4 per cent from 35.6 per cent but the market is now depressed because of the unseasonal rains during harvest time.

“Rural demand depends on good monsoon and we are trying to anticipate what the effects of El Nino might have on rural demand because irregular monsoon not only has an impact on agricultural income but also on food inflation,” said Srivastava.

On CNG sales, the company has witnessed a growth from 15 per cent last year to 19 per cent this year as it introduced six new CNG models. However, Srivastava admitted a slackening in demand because of the rising prices.

The company is trying to achieve a 50 per cent overall market share in the auto industry by revising its strategy from being a player in the compact segment to having a strong SUV portfolio.