ET NowIn an interview with ET Now, RS Kalsi, ED, Maruti Suzuki, shares his views on their latest numbers and also shares his business outlook. Excerpts:
ET Now: What is your view on the latest numbers?
RS Kalsi: Last year was a tough and challenging year. Interest rates did not soften as we were expecting and also fuel prices were high in the beginning of the year. However, we have done quite well and we achieved a growth of 11.1% against the industry growth of 3.9% in the year 2014-15 and also our overall sales were all-time high at 11 lakh 70 thousand plus.
From that point of view, the year has been very good for us and coming to this year, the start has been good and we are expecting a lot of positivity this year. Macroeconomic parameters look to be positive. However, we have to see that with cautious optimism, considering the fact that there has been crop damage and there may be some negative effect of that in the rural markets. However, to compensate for that, we are more focussed on urban markets and our new models like Ciaz, Celerio, Alto, K10 and AMT versions have found very good acceptability in the urban markets. We have also grown by about 11% last year in urban markets. So we are maintaining a good balance between rural and urban markets.
ET Now: We are nearing the end of April month. How has been the month so far? Is it going to be as good as March and Feb or is it going to be any different from March and Feb?
RS Kalsi: We have to compare this on a year to year basis because in March and Feb there are different kind of factors including budget. There are some expectations, phases of duty going up or down, accordingly the sales actually fluctuate during the month of Feb and March. However, if we compare it on year-on-year basis, April is going very well and we are optimistic about the future also.
ET Now: What kind of discounts are currently going on in the market and going forward, do you expect the discounts to increase or what is the outlook on discounts as well?
RS Kalsi: Discounts are highly market driven and I would say that we were able to reduce the discounts slightly in Q4 and at the same time we were able to maintain a good growth. Moving forward, it will again depend on a number of other factors like how interest rates move or how the new models come. It also depends on the competition and many a times customers come with a lot of inquiries, booking are there, but conversions do not take place. Then we have to do the correction through discounts. So it is difficult to predict. However, the range would remain more or less constant, moving forward.
ET Now: How are the commodity prices panning out and going forward, do you see pressure on commodity prices?
RS Kalsi: As of now, it is quite comfortable on that front and overall fuel prices are also low. This should have a good impact moving forward and as of now, we can say that we do not anticipate much change in the near future.
ET Now: Over the last few years, we have seen five sitters SVUs doing very well in the market. We know that you also have a plan to come into five sitter SUV segment and the market is keenly awaiting that. What is your plan there? Is it going to be now pushed to the next year or is it going to be this year only?
RS Kalsi: Maruti had certain gaps in its presence if we look at various segments. So this was one segment where we were absent so far and we are working on this and in this year itself, we will be coming out with some models in this category.
ET Now: You mean this financial year or this calendar year?
RS Kalsi: Financial year.
ET Now: Any likelihood of prices going up because Honda has increased prices? Are you going to increase prices, going to take a call anytime soon?
RS Kalsi: As of now no comments on that front.
ET Now: What is your view on the latest numbers?
RS Kalsi: Last year was a tough and challenging year. Interest rates did not soften as we were expecting and also fuel prices were high in the beginning of the year. However, we have done quite well and we achieved a growth of 11.1% against the industry growth of 3.9% in the year 2014-15 and also our overall sales were all-time high at 11 lakh 70 thousand plus.
From that point of view, the year has been very good for us and coming to this year, the start has been good and we are expecting a lot of positivity this year. Macroeconomic parameters look to be positive. However, we have to see that with cautious optimism, considering the fact that there has been crop damage and there may be some negative effect of that in the rural markets. However, to compensate for that, we are more focussed on urban markets and our new models like Ciaz, Celerio, Alto, K10 and AMT versions have found very good acceptability in the urban markets. We have also grown by about 11% last year in urban markets. So we are maintaining a good balance between rural and urban markets.
ET Now: We are nearing the end of April month. How has been the month so far? Is it going to be as good as March and Feb or is it going to be any different from March and Feb?
RS Kalsi: We have to compare this on a year to year basis because in March and Feb there are different kind of factors including budget. There are some expectations, phases of duty going up or down, accordingly the sales actually fluctuate during the month of Feb and March. However, if we compare it on year-on-year basis, April is going very well and we are optimistic about the future also.
ET Now: What kind of discounts are currently going on in the market and going forward, do you expect the discounts to increase or what is the outlook on discounts as well?
RS Kalsi: Discounts are highly market driven and I would say that we were able to reduce the discounts slightly in Q4 and at the same time we were able to maintain a good growth. Moving forward, it will again depend on a number of other factors like how interest rates move or how the new models come. It also depends on the competition and many a times customers come with a lot of inquiries, booking are there, but conversions do not take place. Then we have to do the correction through discounts. So it is difficult to predict. However, the range would remain more or less constant, moving forward.
ET Now: How are the commodity prices panning out and going forward, do you see pressure on commodity prices?
RS Kalsi: As of now, it is quite comfortable on that front and overall fuel prices are also low. This should have a good impact moving forward and as of now, we can say that we do not anticipate much change in the near future.
ET Now: Over the last few years, we have seen five sitters SVUs doing very well in the market. We know that you also have a plan to come into five sitter SUV segment and the market is keenly awaiting that. What is your plan there? Is it going to be now pushed to the next year or is it going to be this year only?
RS Kalsi: Maruti had certain gaps in its presence if we look at various segments. So this was one segment where we were absent so far and we are working on this and in this year itself, we will be coming out with some models in this category.
ET Now: You mean this financial year or this calendar year?
RS Kalsi: Financial year.
ET Now: Any likelihood of prices going up because Honda has increased prices? Are you going to increase prices, going to take a call anytime soon?
RS Kalsi: As of now no comments on that front.
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