Maruti Suzuki may soon reduce numbers of cars manufactured at its facilities in India as carmakers continue to witness slowdown in demand which has led to drop in car sales over the past couple of months. Struggling to clear inventories, Maruti Suzuki India Ltd (MSIL) has said the carmaker is planning to reduce stockpile lying with its dealers ahead of Diwali this year. Maruti attributed its decision to ‘slower than expected’ demand for passenger vehicles in the first quarter of the ongoing financial year.

According to a report in Business Standard, the statement to reduce production was made by Suzuki Motor Corporation, the major shareholder in Maruti Suzuki in India. During a conference call with analysts, the carmaker said that its sales in the first few months of the ongoing financial year is much less than to what it has manufactured so far. Sales of most of the carmakers in India has been witnessing a downslide recently. Maruti Suzuki, India's largest carmaker, saw its sales drop by 9.64 per cent in July compared to the same month last year.

Reduced sales has led to build up of unsold cars for carmakers. This has also put dealers in a spot as stockpile keeps rising leading into the festive season. Suzuki Motor said, “We are currently adjusting production to reduce market stock and are closely monitoring demand trends. India will be in a critical period with the upcoming festival season; so we will closely monitor demand trends."

Maruti made more cars than it sold between April and June

Maruti Suzuki has not revealed details about pending orders or unsold inventories. However, the carmaker could sell only 4.27 lakh units between April and June despite its production increasing by more than seven per cent during these months with 496,000 cars dispatched to dealers. According to The Federation of Automobile Dealers Associations (FADA), Indian carmakers are currently sitting on around 7.30 lakh unsold cars, roughly what the entire four-wheel passenger vehicle industry usually sells within two months.

Maruti Suzuki sales in July

Maruti Suzuki has seen the sales of its hatchbacks slump in the past few months. The segment, which includes the likes of Baleno, Celerio, Dzire, Ignis, Swift and WagonR models, contributed only 42 per cent of the carmaker's overall sales last month. Its utility vehicle segment, which now contributes almost equal sales as Maruti's small cars, also witnessed slump in July. Demand for MPVs and SUV like Brezza, Ertiga, Fronx, Grand Vitara, Invicto, Jimny, and XL6 were down by 10 per cent during this period.

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