Amid slowing domestic sales, Maruti Suzuki India Ltd. has corrected its inventory levels and now expects to meet its internal 30-day target, according to Chairman RC Bhargava.
“We have corrected our inventory levels and expect inventory levels at 30 days by end of November. We weed to ensure all models are at 30-day inventory,” Bhargava told NDTV Profit.
This might mean a change in Maruti’s production plans. The Maruti India chief said that the company will only produce cars at a level that dealers can sell and monitor retail sales data closely to gauge demand.
He also admitted promotion costs for India’s largest carmaker went up in the second quarter which hit operating margin — something analysts have flagged as an earnings dampener.
“We will only look at retail sales, which tell you the condition of the market, instead of wholesale figures. This will lead to better cost savings,” he said.
Bhargava said the trend in the last couple of years show some models like the popular hatchback WagonR doing well, even though small cars as a segment struggled. “There has to be some form of agility with dealing with market changes.”
Content retrieved from: https://www.ndtvprofit.com/business/maruti-suzuki-share-price-rises-as-rc-bhargava-claims-inventory-issues-resolved.
