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    CNG penetration for Maruti Suzuki stands at around 26%: Shashank Srivastava

    Synopsis

    ​The retail though slightly lower than that 325,000 although it is still a growth over last year almost 14% growth. Maruti, in fact, grew faster in both wholesale and retail and as a result, market share went up 1% in May, now standing just above 43%.

    Maruti SuzukiETMarkets.com
    I cannot really add any definitive thing of whether we will increase prices or not.

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    "There is always a time when you can fill in the pipeline and that is the reason why wholesale at 334,000 in the industry in May was the highest May ever in fact, a growth of almost 13.5% over the previous year," says Shashank Srivastava, Maruti Suzuki.

    Let us talk about your May sales first up. It was actually way above Street estimates. It did beat ET Now estimates as well. And month on month, if you look at your sales number, there was an uptick of approximately 11%. If you could tell us what exactly led to this growth in the month of May, and should we expect this momentum to sustain going ahead as well?
    First of all, if you look at the demand pattern, in terms of bookings, in terms of enquiries, it was pretty good in the month of May as well. In fact, it has been pretty stable in the last few months as bookings grew almost 9% and enquiries were up about 17%, so one is the basic demand itself continuing. Second is also because of the supply issues in the past months, we have seen a build-up of pending bookings. And that also helps in the wholesale numbers because manufacturers, if they are able to produce those vehicles, will be able to dispatch them also.

    And third is, of course, that the dealer stock levels have been pretty low in the last few years. And there is always a time when you can fill in the pipeline and that is the reason why wholesale at 334,000 in the industry in May was the highest May ever in fact, a growth of almost 13.5% over the previous year.

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    The retail though slightly lower than that 325,000 although it is still a growth over last year almost 14% growth. Maruti, in fact, grew faster in both wholesale and retail and as a result, market share went up 1% in May, now standing just above 43%.


    What we also want to know is post those price revisions of CNG, how is the CNG sale shaping up? Seems like it is inching up on a month-on-month basis and what is the share of CNG currently in your order book then?
    CNG sales, you are right, have gone up. Remember, just a couple of months back, I think it was the first week of April that we saw the increase in the difference between the CNG and petrol prices. In other words, CNG prices came down by I think Rs 6 to 7 and that has further given a push to the CNG sales. CNG penetration for Maruti Suzuki stands at around 26% now, which is really quite good. In fact, the highest level that we have seen since it was launched in 2010.

    Overall, the industry is touching almost 13% CNG which means that when you compare it with diesel penetration of about 17.5%, it is now like CNG is similar to diesel. At one point of time, it was thought unthinkable. So yes, CNG sales have done well. Of course, Maruti Suzuki has increased the number of models which have the CNG. So now out of our 17 models, 15 have CNG. So that is what has helped CNG to grow and we see good traction. In the total bookings, we have about 365,000 bookings overall. I am talking of Maruti Suzuki, out of which about 120000 are CNG.


    Let us talk about the steel components that automakers actually use. Steel companies are announcing further price cuts in domestic markets. Are you in discussions with any of the steel suppliers with this regard? And how do you see the prices headed from here? What sort of an outlook are you getting from these players?
    It is like this, on the commodity prices we have seen recently some softening whether it is copper, aluminium, or the rare metals like palladium or rhodium etc. Steel prices have seen a little bit of hardening in the past quarter. Again, people are talking of a softening steel but when you compare these price levels with what they were two years back, the commodity prices have really become very high.

    Even after a little bit of softening in the recent quarters, they remain very high compared with what they were two years back. And that has been the main reason why manufacturers have had to increase prices so many times in the last one and a half years.

    Maruti Suzuki has also increased prices, although I must say, we have not really covered the entire input costs which have gone up because of the commodity price increases. Remember, the material cost is about 75 to 77% of the total cost structure for any auto OEM. So it has a very-very material and big impact on the overall cost structure.


    So like you were mentioning, since you have not taken all those increases in the input cost in your pricing, so would you be planning more price hikes then?
    Right now, we have not decided. We did increase the price in April, as you know. So we are watching the situation. As always, it is a continuous process of monitoring the commodity prices. So we have not really decided either way whether to increase or keep the same. So therefore, at this point of time, I cannot really add any definitive thing of whether we will increase prices or not.





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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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