Maruti has set two targets for itself –
- Become No. 1 in SUV by FY 24
- Which would help it regain it’s 50% market share (as was the case earlier)
Over the years, Maruti has lost some ground to the competitors. It was controlling almost half (50%) of the Indian passenger vehicles (cars) sales for years and then gradually started losing. In CY 22, it’s market share stood at 41.6%.
This is though still way higher than the second largest (Hyundai 14.6%).
The reason for decline have been varied; stoppage of diesel cars; poor product launches; and better strategies from the competition (Tata, M&M, Kia).
The most significant reason has been – growing preference of customers towards SUVs over Sedans/ Hatchbacks, where Maruti doesn’t have strong product offerings.
Finally, Maruti seems to have recognised this trend.
- Recently refreshed Brezza and launched Grand Vitara
- Is soon launching much awaited Thar’s competitor Jimny and Baleno based crossover Fronx
Maruti believes that these models will help it become No. 1 in SUV by FY 24 as against it’s 16-18% market share currently.
As per the Company that will also help it in regaining it’s earlier overall market share of 50%.
Company’s MD, Hisashi Takeuchi made some notable broad comments in this regard:
- He expects the overall market share of SUV to saturate at around 50% (as against 42% in CY 22)
- This prediction is based on the data from other countries. (In evolved markets like Europe, SUVs account for 45% of the sales)
- Maruti expects Fronx to become very popular in the domestic market. Jimny is going to be primarily for exports.
Keeping everything in perspective, points worth noting –
- If overall market grows by 10% in FY 24, Maruti needs to grow by approximately 30% to return to 50% market share. Personally, I don’t see that happening –
- Significantly aggressive competition, especially from Tata, M&M, Kia, MG
- Maruti’s absence from the Diesel segment and laid back approach towards EVs
- Customers’ increasing awareness and preference towards safety, wherein Maruti needs significant overhaul
- Even on SUVs, I personally doubt it will become No. 1. Position should improve though.
Good observation especially maruti should upgrade their safety standards as many customers still prefer it due to ease of access of spare parts and servicing but are unaware of their safety standards