Automobile sector going through difficult time, government can help, says Kenichi Ayukawa, MD Maruti Suzuki

Kenichi Ayukawa, Managing Director of Maruti Suzuki on Wednesday said some support from Central government would help revive consumer demand in the domestic automobile market, which has been reeling under a steep decline for the past one year.

“This is a difficult time. In the past tax deductions had helped encourage the market. If the government decided that way, it will be very helpful. On our part, too, we have to make efforts. That is very important,” Ayukawa said.

Automobile sector executives have appealed to the government to reduce Goods and Service Tax on new vehicles to 18% from the present 28% at least temporarily, announce a vehicle scrappage policy, and ease credit availability to the sector to boost demand.

Sale of Passenger vehicle across India declined 31% on year in July at 200,790 units, while automobile sales declined 19%, both steepest fall since December 2000.

Maruti Suzuki is making attempt to enthuse customers through marketing and new launches ahead of the festive season that will begin in September.

Maruti on Wednesday launched MPV XL6 priced at ₹9.79 lakh (ex-showroom). As many as 289,000 multi-purpose vehicles are sold in the local market annually.

The company is “hopeful” that there will be an uptrend in sales during festive season, said Shashank Srivastava, executive director (marketing and sales) at Maruti Suzuki,

However, Maruti Suzuki will not stack up vehicles in showrooms during the festive period. Srivastava said that focus would solely be to drive retails. Inventory levels at the company stand at around 35 days. And further production would be aligned to how retail sales fare.

Ayukawa also said the Indian automobile industry is undergoing a major shift in terms of new regulations, new technologies and new policies. As a leading manufacturer, Maruti Suzuki will ensure meeting all these regulations, expectations and requirements, he said.

“We will be ready much before the stipulated timelines.”

The company has already upgraded seven of its best-selling petrol vehicles to meet BS VI emission standards. Maruti is investing in its R&D centre to introduce technologies and increase localisation. Through focus on new technologies like CNG, hybrid and EVs , the company aims to bring down emissions and give environment-friendly mobility solutions to its customers, Ayukawa said.