The average discount the company offered in the June quarter increased to Rs 21,000 per vehicle against Rs 17,500 in the March quarter, which improved entry-level passenger car sales by a significant 22% y-o-y to 1.19 lakh units in the quarter under review.
This segment now constitutes about 44% of the total sales, compared with 40% during the same quarter last year. The company even offered discounts ranging from Rs 40,000-45,000 per vehicle for entry-level cars to crank up its volume.
There's another factor that helped Maruti raise its game: first-time buyers. The sales volumes for first time buyers in the June quarter rose to 43% compared with 39% in the corresponding quarter last year.
The carmaker strategically targeted first-time buyers, offering them higher discounts, turning several such enquiries into sales. Despite the auto industry witnessing a decline in this period, Maruti Suzuki posted a volume growth of 12% on a year-on-year basis.
In a conference call post earnings, the Maruti management said, "After many quarters, the company has witnessed a 12% growth in its urban sales during the June quarter while rural sales increased 26% — both these factors helped the company attain a market share of 44% in the passenger car segment. Our market share was 40.4% a year ago. We have also witnessed a rise in enquiry levels, which have increased by as much as 10%."
The market would, however, keep a close watch on how soon a 'push demand' can change into a 'pull demand'.
The long-term sustainability of sales volume and a change in the demand scenario depend to a large extent on macro indicators like economic growth and job creation.
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