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suzuki: Suzuki Motor raises sales forecast on India boost

Japanese auto major Suzuki Motor Corporation (SMC) has raised its sales forecast for the fiscal year, with India accounting for more than two-thirds of the increase, on the back of a strong recovery in demand in the local market amid easing component supplies.

The parent company of market leader Maruti Suzuki expects to close the fiscal with sales of 3.04 million vehicles, compared to the previous projection of 2.91 million units. Sales in India are expected to grow by 21% in this period. Meanwhile, Suzuki’s output this year is projected to be 3.27 million units, up from the earlier forecast of 3.1 million units, the company said while announcing its financials for the September quarter this year.

Volumes in Japan are expected to grow at a slower pace against earlier estimates this fiscal as plants continue to suffer from suspension of production due to shortage of components since May 2021, sales in the Asia region overall have been revised upwards by 136,000 units. India accounts for about 85% of Suzuki’s automobile sales in India and will chip in about 115,000-117,000 units to this volume growth.

In the first six months of year, while sales in India went up by 34.4%, volumes fell or remained flat in Indonesia, Pakistan, Thailand and Philippines for SMC.

Production in India has bettered the past few months on improved chip supplies helping Maruti Suzuki deliver pending orders to customers. “Today, we are in a much more optimistic situation. The availability of semiconductors, which had seriously affected growth, has improved and the economy is doing well,” said Maruti Suzuki Chairman R C Bhargava in a recent interaction, adding, “This year, we have got to a stage where we (passenger vehicle industry) will breach levels seen in FY19 and lay the foundation going forward.”

Buoyant consumer demand, especially for midsized passenger vehicles, is expected to spur sales close to the 4 million mark locally this fiscal. Maruti Suzuki itself is expected to close the year with sales at levels like those of FY19 when the company sold 1.75 million units, Bhargava had said after the second quarter results.

Maruti Suzuki had pending orders for 412,000 vehicles at the end of the second quarter. Nearly a third of the bookings are for the newly launched models – SUVs Brezza and Grand Vitara. Bhargava said the company has “not” given up on its target to clock annual sales of two million units, but a lot would depend on the adequate availability of semiconductors in the remaining five months of the year. Currently, the company’s capacity utilisation stands at about 90%.

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