Around 55 percent of the car buyers would like to wait for BS-VI (Bharat Stage VI) rather than going for BS-IV vehicles currently available in the market, says research carried out by Maruti Suzuki India Limited (MSIL).
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CNBC-TV18 caught up with Shashank Srivastava, executive director, sales and marketing at MSIL at a time when the automobile industry has been hit by a slowdown and uncertainty as a result of BS-VI norms which come into effect from April 2020.
"Our research reveals that 55 percent people would like to wait for BS-VI and only 15 percent would like to buy BS-IV and 30 percent would be undecided," said Srivastava.
MSIL has already rolled out BS-VI variants for Alto, Baleno, WagonR, Dzire and the Swift. Srivastava confirmed that they would like to make a complete transition from BS-IV to BS-VI production by end of Q3 or by the beginning of Q4.
Passenger vehicles sales have been down for the last eight months. According to Society of Indian Automobile Manufacturers, wholesale numbers for passenger vehicles were down 24 percent in June (YoY). MSIL too saw sales dropping 20.8 percent and also slashed production by 15 percent.
Srivastava told CNBC-TV18 that going forward, MSIL is going to focus aggressively on liquidating stocks and pushing retail sales, "Dealer stock has gone up and there is stress in the system. We are hopeful of a positive festive season. MSIL will be launching extensive consumer promotion schemes and dealer support schemes for the festive season starting August."
According to him, MSIL was in talks with various banks to support inventory financing and dealerships which are under stress. He confirmed that inventory levels for MSIL had gone up from 15-20 days to 30-34 days, but were still lesser than other original equipment manufacturers (OEMs) that hold 50 days of stock on an average.
Federation of Automobile Dealers recently said 286 dealer outlets have shut down in the last two years. Srivastava stressed that MSILs non-performing assets (NPAs) were less than 1 percent compared to the industry average of 2 percent and out of 177 dealerships that have shut down in two years, only four were Maruti dealerships.Srivastava said MSIL was still not very confident about the demand for electric vehicles because of the high battery cost, "The Indian consumer is price sensitive. We will launch an electric vehicle in 2020 in a phased manner."