India's largest car maker Maruti Udyog Ltd's 36.5 per cent growth in domestic sales volume during the first quarter of the current fiscal may not be sustained for the rest of the year.
Indicating this in Hyderabad on Thursday after signing an agreement with the State Bank of Hyderabad for financing Maruti cars, Jagdish Khattar, managing director of Maruti, said the growth rate was against the poor performance of last year's first quarter and the car sales had picked up from August 2002, which makes it difficult to sustain.
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"We would love to sustain such a growth rate. In fact, we have increased our market share from 52 per cent to 55 per cent. But we need to be realistic and practical," Khattar said.
He, however, observed that Indian automobile market is set to grow with the expansion of road networks, availability of easy finance and excise duty cuts being announced by the Centre.
"About 75 per cent of the cars sold are covered by organised finance. Unfortunately, it is happening in larger cities and towns. Though Maruti has outlets in 160 cities in the country, organised finance is available only in 60 centres so far.
"With the arrangement through State Bank of India and its associates, we will be able to bridge the gap. It is a close fit between the two organisations," Khattar said.
"We will be going to areas where organised finance is not available. This will create demand for cars," he said.
Khattar also hoped that the excise duty on cars would come down to 16 per cent by 2005 from the present 24 per cent and last year's 32 per cent, as indicated by the Union government earlier in its stated policy on indirect taxes.
