Demand Slowdown: Maruti Suzuki to cut production

due to a demand slowdown triggered mainly by higher interest rates and fuel prices


August 14, 2011

NEW DELHI: Leading Indian carmaker Maruti Suzuki is cutting production this month due to a demand slowdown triggered mainly by higher interest rates and fuel prices, reports said on Saturday. The Japanese-owned car maker, which sells nearly half the cars in India, reported earlier in the month that its sales had fallen by 25.3% in July from a year earlier, the company’s sharpest ever monthly fall. “We have reduced the production of all the models except Swift and Dzire this month,” said Maruti’s Managing Director Shinzo Nakanishi. India’s central bank has hiked interest rates 11 times since March 2010 in a bid to tame near double-digit inflation. Analysts say that the longer-term vehicle sales outlook is still strong in India, where just one in 10 households in urban areas and one in 50 in rural areas own cars.

Published in The Express Tribune, August 14th, 2011.

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