December sees uptick in bookings: Maruti Suzuki

New Delhi: India’s largest carmaker Maruti Suzuki said on Friday that after contraction in bookings in November due to demonetisation, it saw 7 per cent positive growth in December.

In rural areas Maruti saw a growth of 18 percent in sales in December against a dip of 11 per cent in November despite cash crunch in these areas.

Maruti sales are high in rural areas despite the fact that a large per centage of people here prefer to buy new vehicle through cash when compared to urban areas.

Maruti’s double digit growth in sales in rural areas is contrary to reports of cash crunch after demonetisation in these areas. Around 30 per cent of Maruti sales come from rural areas.

Maruti has 50 per cent market share and a positive growth by it will pull the overall auto sales in the country in December.

This announcement will come as a relief to the government as auto sales are one of the indicators of the economic activity and may indicate that demonetisation impact may not be as severe as earlier feared. It will also show that people have come out of the initial shock of note ban.

“The retail sales in October and November still grew by 6-7 per cent as compared to last year. However in November certainly bookings fell by around 20 per cent but bookings in December till yesterday grew by 7 per cent. So what this indicates to us is that  after demonetisation took place there was certain amount of uncertainty or concern. But the trend has changed,” said Maruti Suzuki India (MSI) chairman R.C. Bhargava.  

Mr Bhargava said that signs are that cash availability in banks are now much better. However while new car bookings have begun to pick up, sales of used cars remain in the slow lane. Mr Bhargava said that bookings at Maruti’s TrueValue outlets declined in November and December.

He said that this may be due to fact that people don't usually prefer taking loans to buy used cars as interest rate are high than what is for a new car.