Maruti will focus on the SUV segment, hence reducing the production of small cars.

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Close to the country Auto company Maruti Suzuki India, which commands a 50 percent share of the car market, is going to make a big change in its plans. The company will manufacture the vehicles as per the market demand. A senior official of the company said it wants to bring more ‘flexibility’ in its production process to suit emerging market conditions. The country’s largest carmaker is focusing on increasing production of top-selling utility vehicles and SUVs while reducing production of entry-level cars. “The demand gap between the utility and small car segments continues,” Rahul Bharti, executive officer of corporate affairs at Maruti Suzuki India, said in an analyst call. The company is working to increase flexibility in operations to produce vehicles in line with growing market demand.

This was the reason for the fall in margins.

He said the company’s recent decline in margins was due to producing some less-sold cars. “We don’t have enough capacity to produce the cars that are in demand,” Bharti said. If we had flexibility in both, be it semiconductor supply or domestic production, we might not have faced such a problem.” MSI’s plants in Haryana and Gujarat currently have an annual installation capacity of 2.3 lakh units. . Bharti said that the cost of this initiative is quite low. Regarding the decline in sales of entry-level cars, he said the cost of acquiring such cars has increased as regulatory norms have become more stringent over the years. He said that there has been no increase in the income of consumers in this segment. We are hoping that sooner or later their income will increase and the small car market will recover.

First-time car buyers decline

Bharti said that the number of first-time car buyers has also decreased. “We have about 10 percent fewer first-time buyers in the market,” he said. We believe that as the income of the population of this segment grows along with the expenditure and the regulatory rules are not too strict, then this segment will bounce back at some point.” According to SIAM data, body vehicle manufacturers In the current fiscal year, wholesale sales of entry-level cars in India declined to 35,000 units in the second quarter of 2018. It was at an all-time high of 1.38 lakh cars in July-September 2018-19.

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