Maruti Suzuki to expand its SUV market share in India
Maruti Suzuki is clear about where its growth in the next few years is going to come from. It is going to be the stylish and high margin sports utility vehicles (SUV) space. Maruti Suzuki, India’s largest passenger car manufacturer by a margin, plans to introduce a range of new models in the sports utility vehicles segment (SUV) segment. This is a space, where it has traditionally lagged behind its peers. Now, Maruti is pegging a very substantial increase in its market share of the SUV segment starting from the current financial year. For now, it will focus on its 2 leading SUV brands viz the new Vitara Brezza and the Grand Vitara.
Actually, if you look at the way the market share of Maruti in the SUV space has grown in the last few months, it seems to have a logic here. For instance, in July Maruti had a 7.1% market share in the SUV segment. That shared subsequently increased to 10.8% in August 2022, further to 13.01% in the month of September 2022 and finally up to 14.4% for the month of October 2022. In short, between July and August 2022, Maruti Suzuki has doubled its market share in the SUV space. The base may have been small, but still doubling of market share at any level is no mean feat. Maruti has admitted that trend is towards SUVs.
With the supply issues resolved, with supply chains under control and the supply of microchips for cars now a lot more under control, things appear to be back under control now. Now Maruti wants to make hay while the market reaction is still so positive for the SUV, considering that it has been able to build market share so rapidly. In a sense, in the last couple of years, Maruti lost its market share as it fell from 51% to 41% just because it did not participate in the SUV demand story. Now Maruti wants to reverse that trend by putting its biggest focus on the SUV space. It wants to get back to 51% market share by next year.
Maruti Suzuki did not start too badly in the SUV space. In FY22, the market share of Maruti Suzuki India in the SUV space was 10.9%. However, the subsequent supply chain problems made this share stagnate and even taper from these levels and it is only getting back to normal levels now. In fact, the lower share in the SUV market place is seen as the key reason for an aggregate drop in market share of Maruti Suzuki in the passenger vehicle segment from a high of 51% in FY19 to just 41% in FY22. For that revival it is betting big on the compact-SUV segment; where Brezza is the market leader and the Grand Vitara is fast catching up momentum for Maruti Suzuki.
Maruti is actually on target The SUV space is the fastest growing segment in India and if Maruti has to make a mark, then it has to be a big bet on the SUV space. That is what it is doing now. Consider these statistics. India's overall market in the passenger vehicle space consists of 30 lakh units on an annualized basis. What is surprising is that the SUV segment is rapidly chalking out the lion’s share of around 45%. Unless Maruti is able to capture this lucrative growth area, it will continue to lose market share. Companies like M&M and Tata along with other players have dominated the SUV space for a long time. Their products have long waiting times and Maruti now has to catch up fast.
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