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Maruti Suzuki cuts production as India's auto industry slows down

Maruti Suzuki is scaling back production amid slowing passenger vehicle demand in India during Q1 2024-25. Factors such as the Lok Sabha election, adverse weather, and a typically weak Q1 have led to rising inventories.

By Dhanam News Desk
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Maruti Suzuki cuts production

Maruti Suzuki is reducing production after a slowdown in car market. Image: marutisuzuki.com

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Maruti Suzuki India Ltd (MSIL) is reducing production in response to weaker-than-expected demand for passenger vehicles in the first quarter of the 2024-25 fiscal year, according to a report by Business Standard

Suzuki Motor Corporation (SMC), the majority shareholder of MSIL, confirmed the cutback, citing the need to address growing inventory levels at dealerships.

"We are currently adjusting production to reduce market stock and are closely monitoring demand trends. With the festival season approaching, we are keeping a close watch on how the market responds," SMC said during a conference call with analysts, as reported by Business Standard.

Mounting unsold inventories

Despite an annual production increase of 7.4% in the first quarter to 496,000 units, sales only grew by 1.2% to 427,000 units. This slower growth has raised concerns across the Indian auto industry, with unsold vehicle inventories mounting. 

The Federation of Automobile Dealers Associations (FADA) has reported around 730,000 unsold vehicles, equivalent to over two months of sales. However, the Society of Indian Automobile Manufacturers (SIAM) estimates the inventory closer to 400,000 units.

Suzuki Motor Corporation (SMC) noted that Q1 is traditionally slower but this year, demand has been hit harder than expected by the Lok Sabha election and adverse weather conditions. Production levels are being adjusted accordingly while expecting a potential rebound during the upcoming festival season, SMC explained.
   

(By arrangement with livemint.com)