The CEO of Maruti Suzuki India says that the increase in interest rates has not yet affected the demand for cars, but the real situation will appear when the problem with semiconductors is resolved and production begins to normalize.
The company’s order book increased to 3.87 million units from about 2.8 million units in the previous quarter, thanks to new products such as the Grand Vitara and Brezza, according to the senior director of marketing and sales. Suzuki India.
Naturally, this might have negative effects as borrowing rates have an impact on discretionary spending, which includes spending on cars, he said in an interview.”But we haven’t seen that yet.”
He answered questions about whether the increase in interest rates will affect the demand for cars.
Earlier this month, the Reserve Bank of India raised its key rate by 50 basis points, the third consecutive increase since May, and brought interest rates back to pre-crisis levels.
Srivastava said the reason why the rate hike is not affecting demand is due to supply disruption and semiconductor shortages during this outbreak as production is affected and cannot be restored to meet demand.
Read also: Maruti Alto K10, Mahindra’s big event, the launch of Ola’s first electric car
As for the availability of semiconductors, even if it has improved significantly, it is still limited to bringing the company’s production capacity to 100%, and it is difficult to give a timeline of full compliance.
There are no plans for the future regarding shift availability, according to Srivastava.
“We don’t know when we will be 100%. Prospects for semiconductor supplies in the future are limited. We get equipment every week and change our plans, but one thing is for sure: a quarter of it. be 100% normal.” Srivastava said.
The MSIL plants in Gurgaon and Manesar in Haryana have a capacity of about 1.5 million units per year. Suzuki Motor Gujarat, which exclusively supplies vehicles to MSIL, has an additional installed capacity of 7.5 million vehicles per year.
The MSIL plants in Gurgaon and Manesar in Haryana have a capacity of about 1.5 million units per year. Suzuki Motor Gujarat, which exclusively supplies vehicles to MSIL, has an additional installed capacity of 7.5 million vehicles per year.
Srivastava said the company has already received 40,000 orders for the new Grand Vitara SUV and deliveries are expected to begin in September.
In addition, about 90,000 orders have been received for the new Brezza, of which about 70,000 have yet to be completed. Maruti Suzuki wants to increase the production of this model to 10,000 units per month, which was achieved last year.
“There is also a waiting period for the new Ertiga, XL6, and Baleno,” he said, adding that pending orders for the Baleno are around 38,000 units. Regarding the growth of the industry, Srivastava said that the automotive segment has recorded record sales in the current financial year.
Read also: India’s semiconductor consumption to reach $300 billion by 2026, up 19% year on year
to 3.7.337 million units in 2018-19,” he said.