India’s Maruti Suzuki forecasts declining sales volume in the current fiscal year, as the carmaker witnessed heavy production losses due to a labor strike. Another cause for the negative prognosis is the weak demand for cars in India, Asia’s third largest economy.
“We’ll be lucky if we break even with last year,” Maruti Suzuki Chairman R.C. Bhargava said in an interview for the Reuters India Investment Summit. Specialised in small models, Maruti Suzuki sold 1.27 million cars in the fiscal year that ended in March, accounting for 25 percent increase compared with the previous fiscal year.
“So, it might even be slightly less than last year. There are still four months to go. Let’s see how it goes but I doubt if we’ll have any growth this year,” Bhargava added. The executive declared in August that he had expected Maruti to post single-digit sales growth this fiscal year.
Bhargava now expects the Indian automobile industry to grow 2-3 percent this fiscal year, compared with a record 30 percent growth a year ago. He blamed the slowing economic growth, rising interest rates and fuel prices, as well as falling stock markets. Maruti’s market share in India has dropped from nearly 50% last year to just over 40% this year. Suzuki owns a 54.2 percent stake in Maruti.