Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Indian carmaker Maruti Suzuki remains bullish on the long term growth of the automotive sector based on their study which reveals that auto demand is very closely co-related with GDP and per capita income. Over the last 25-30 years this correlation was true.

 

The automaker’s long-term projection is simply based on the Indian economic growth pattern. They believe that the economy in the long run will be positive which will impact auto demand too. The company is bullish on the long-term growth for the domestic auto industry despite the glitches. The company is finding it difficult to predict the sector’s short-term outlook. 

 

In terms of production and sales, the company said that there is yet a long way to go to reach pre-COVID or normal levels. Monthly auto sales are picking up compared to previous year but 2019 was a weak base year, according to the Maruti.

 

Maruti reiterated that despite auto sales growth in July and August which surprised them too, they are way away from the normal volumes of production and sales. 

 

The company is however ramping up production in September to improve stock at retail level to meet the festive demand. The company in a bid to reduce costs is focused on reducing component and overhead costs and improve productivity. The company’s profitability, input costs are pressured, said Maruti. 

 

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