Maruti Suzuki Hiking Margins For Dealers On Best-selling models

In a bid to add liquidity along with subduing the demand for the top-selling cars, Maruti Suzuki dealers have raised its margins by Rs. 3000 per vehicle on Maruti Dzire, Swift and Vitara Brezza. 

Maruki Suzuki has increased the dealer margins by Rs. 3000 per vehicle from January

As per report, it has been taken into effect from January this year even though the company has been facing a low demand since late last year. Previously, the carmaker was also reported to cut down its production by 8.3 percent. The increased margin on the three models is expected to offer additional liquidity to the dealers once the demand has dropped.

In a press released, it has been said that,

“The dealers have been offering huge discounts and inventory has again piled up in February,” 

The hike in terms of margins could be explained by the increasing cost of new showrooms, service centres as well as the existing outlets. Additionally, the sharp rise in operating cost of employee salaries and real estate rent are also among the reasons. In general, this margin increase at the dealer level is unlikely to affect considerably the financials of the company or the price hikes. Maruti Suzuki has raised the dealer margins on the three models which are Dzire, Swift and Vitara Brezza from around 6-7% to 8-.8.5%.

The margin amount is from around 6-7% to 8 - 8.5%

In the country, the total car sales in February has declined by 8.25 percent to 215,276 units, as opposed to the 234,632 units rolled out in the same period of time in 2018, according to the data released by the Federation of Automobile Dealers Associations (FADA). Notably, Maruti Suzuki alone registered 100,513 passenger vehicles in February. In which, 18,224 units were of the Swift, 11,613 units of the Vitara Brezza and 15,915 units of the Dzire. In terms of production, these top best-selling models from Maruti Suzuki are reported to stand at 147,550 units last month with a decline of 8.4 percent over 161,116 units in February 2018.

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