Maruti Suzuki India Limited has increased dealer margins by 8% to 10% on every petrol car sold. This strategy is being applied in order to boost declining petrol car sales in the country. Rising petrol prices has been the main reason behind the dip in demand of petrol variants and hence the company has agreed to raise commissions so as to boost sales of all petrol cars. Maruti Suzuki India’s market share in Indian auto industry too has suffered. For the first time, MSI’s share has gone down to below 40%.
Maruti Suzuki’s range of petrol cars include WagonR, Estilo, Alto and these would attract a commission of Rs.1,000/- more towards dealers. For petrol cars such as Ritz and SX4 would dealers would receive Rs.1,500/- extra while for A Star they would received Rs.2,000/- more as their commissions.
This is the first time that there has been a hike in commissions and this is primarily due to decreased demand for petrol variants. While demand for petrol variants is declining, auto companies are revving up their production of diesel variants, which has seen high volume sales, because it is cheaper and more efficient than its petrol counterpart.
Auto manufacturers such as Hyundai and Volkswagen offer upto 7% to dealers in commission while Maruti Suzuki dealers are offered only 4%. Maruti Suzuki profits have dipped by 39% in the first 9 months of the current financial year as compared to a similar period in the previous financial year. Suzuki Motors global production too suffered for the first time in 11 years as MSI production declined.