India’s largest carmaker Maruti Suzuki India on Friday, said that it has produced a total of 1,652,653 vehicles during FY22, 13.4% up over the previous year, with the domestic sales witnessing an increase of 3.9% to 1,414,277 units, over FY21.
During FY22, the company registered net sales of INR 83,798 crore compared to INR 66,562 crore in FY21. Despite a 26% increase in net sales, the net profit for the period declined by 11% over the previous year to INR 37,663 million, an official statement from the company noted.
It added that production during the year was impacted by the shortage of electronic components by an estimated 270,000 vehicles, mostly domestic models, because of which there were pending customer bookings of about 268,000 vehicles at the end of the year.
RC Bhargava, Chairman, Maruti Suzuki India, noted that the chip shortage has been a major blow to the company’s production this year. He added that the waiting period at the end of March 22 was 280,000 customers, while at this stage, it has gone above of three lakh mark. “I don’t see the waiting period being liquidated by the end of this year due to the chip shortage,” he said.
Additionally, the increase in commodity prices due to the geopolitical situation has resulted in a price hike in vehicles, especially at the lower end of the market.
Bhargava stated that once been the bread and butter of the company, the entry-level cars have fallen off the demand chart due to the increase in price, which has led people to be unable to afford them. He added that the price on an average in the segment has risen by 32% compared to FY19.
Last three years, the market for entry-level cars has been shrinking significantly. During FY19, the company sold around 15.5 lakh entry-level vehicles, while during FY22, the numbers fell to 11.5 lakh units for the same.
The demand for higher-end vehicles has gone up from 18 lakh units to 19 lakh units in the same time and is continuing to rise.
However, he also noted that commodity prices follow a cyclic pattern. This would mean that these prices might come down in the near future.
However, on the flip side, the company claimed to achieve its highest ever exports during the fiscal year. It recorded exports of 238,376 units in FY22 compared to 96,139 units in FY21, a 148% rise YoY. Moreover, it is also about 62% higher than the peak exports in any financial year, the company said.
The chairman mentioned that the company had exports of $350 million during the fiscal year. The company expects that the exports will be maintained at a higher rate this financial year as well.
Future Plans
Bhargava said that the Capex for this year is INR 5,000 crore. He added that the company plans to expand its Manesar facility to accommodate 100,000 additional units per year. This will be completed by April 2024, he noted.
Additionally, as the demand for entry-level cars is shrinking, the company plans to shift its focus to more demanding segments. “We have to adjust to the market conditions,” the chairman said, adding that the company had very limited launches during the last fiscal year due to the disruptions. But for this year, it has planned a number of launches, including products in the SUV segment.