Maruti Suzuki rules out price hike, expects 6% growth
Feb 19 2013 , New Delhi
"We think that this (fiscal) year Maruti will grow by about 5.5 to 6 per cent," Maruti Suzuki Ltd Chairman R C Bhargava said on the sidelines of India-UK CEO Forum here.
On whether there will be price hike in the coming months, he said: "I don't see price hike taking place."
The cost of owning a car is going up largely because of fuel prices, he said.
Last month, Maruti Suzuki India increased the prices of its vehicles across models by up to Rs 20,000 to offset the pressures of adverse currency fluctuation.
The company sells a variety of models, starting from M800 to imported Kizashi at a price range starting from Rs 209,000 and going up to Rs 17.52 lakh, (ex-showroom, Delhi).
Asked about growth prospects for the next fiscal, Bhargava said: "This year continues to be difficult for the sector. Next year, probably, the growth will be flat."
Since October, car loans rates of private banks have actually fallen by 2 per cent and lowering of interest rates by 2 per cent has not led to higher sales, he added.
Growth rate will not improve very much unless the Budget does something for better investment sentiment, he said.
On Budget expectations, Bhargava said: "We are not in favour of sops but complete measures like GST (Goods and Services Tax) that will create a lot of good sentiments... We don't really get growth from sops because it will temporarily boost sales. But it cannot give long term industrial growth."
He also said the growth will also depend on the election result of 2014.
"...because if you have a coalition government and driven by the same kind of coalition 'dharma' which the PM has mentioned then you will have difficult time again," he said.
On the labour trouble issues facing the sector, Bhargava said, "If the economy and demand continues to be stagnant and industry finds it difficult to meet, it could give rise to more labour troubles. But if the economy picks up again, people will start getting jobs."
When asked about the outlook for next 6-8 months in the light of brewing tension at Hero plant, he said: "I think once wage settlement is done in Hero...and once that will be done, there will be peace for sometime. We have had the wage settlement, Honda have had wage settlement."