“I do not think a 15 per cent growth is possible in rest of the four months when the past five months saw a flat or no growth. No event can take the market to a high double-digit rate of growth. But we will still close the year with a single-digit growth," R C Bhargava, chairman at Maruti Suzuki, told Business Standard.
A slowing growth rate at Maruti Suzuki
is also a worry for the overall industry growth since the carmaker commands share of 52 per cent in domestic market.
The Suzuki-owned company managed to clock a double-digit growth for four consecutive years with the launch of blockbuster models such as Baleno, Brezza, and new Dzire. In FY18, the company's volume had expanded by 13.4 per cent to 1.77 million units. Had it managed to grow at a pace similar in FY19, it could have well achieved a milestone of 2 million units in annual sales, ahead of 2020. “We could have got closer to 2 million units in FY19. Now it will happen in the next financial year,” said Bhargava.
The slowdown in growth is an industry-wide trend and companies are adjusting production to bring down the inventory levels at plants as well as dealerships. Manufacturers had pumped dealerships with inventory, anticipating a strong festive season, which turned out be a lacklustre one.
According to the Federation of Automobile Dealers Association (FADA), the apex association of automobile dealers, the registration of passenger vehicles (cars, vans, and utility vehicles) declined by 14 per cent to 287,717 units in the festive season of 2018 compared to the last year. As a result, dealers have been saddled with unusually high inventory levels, triggering heavy discounts to clear stocks.
Bhargava said the company would not slow down the sales network expansion in spite of a drop in growth. "India is among the fastest growing car markets of the world. Short-term blips do not matter. We remain absolutely confident of the long-term growth prospects of the market,” he added.