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Maruti Sales Surge in Feb 09
Mar 20, 2009

The sales of Maruti Suzuki India Ltd. surged to 79,190 vehicles during February 2009 due to low interest rates, rising export and higher customer spending.

Maruti Suzuki India Ltd., manufacturer of almost 50% cars sold in India, registered sales growth of 24% last month (February 2009) due to its all time high exports as well as local demand, as reported by Bloomberg.

The Indian division of Suzuki Motor Corp. claimed that overall sales of Maruti rose to 79,190 vehicles during February 2009 compared to 63,822 in the same month last year. February month sales figure surpassed the January’s figure of 71,779 which was a considered a record. In addition, Maruti’s exports rose 90%, reaching 8,565 Units, during February 2009 against February 2008. Local sales of Maruti also increased 19% in February 2009 to 70,625 from February 2008.

Maruti export sales increased after the Company raised shipments of A-star cars which are sold as the Suzuki Alto in Europe. Moreover, local sales touched record level with the easing lending procedure by the banks. It is noteworthy that the lending procedure was made more rigid after the Lehman Brothers Holdings Inc. got collapsed in September 2008. Banks are now increasingly lending money to dealers, which in turn, are supporting the car dealers in building inventories.

RBI, in an attempt to address the global downturn, has slashed the rates to a record low level since October 2008. It has also minimized the cash reserve ratio (CRR), or the share that deposits lenders should set aside in the form of cash, enhancing the flow of credit in the country’s economy.

To boost the economy financially, the Indian government has reduced taxes and in the meantime, expenditure on roads, port and other infrastructure activities has been increased. In addition, purchasing by government employees after they got 6th pay commission arrears a month before, and low interest rates on car loans also pushed up Maruti sales in domestic market during February 2009.

However, the automobile industry in India is still facing many problems as the two stimulus packages given by the government during December 2008 and January 2009 resulted in a mix performance by car manufacturers in the country.

According to a Research Analyst at RNCOS, “The sales figures of Maruti represent starting of the calendar year with bang. The industry is optimistic of further growth in sales, but it should aimed at strengthening consumer sentiments and continue to improve the efficiencies.”

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