Maruti targets to regain old glory

Maruti has set two targets for itself –

1. Become No. 1 in SUV by FY 24
2. 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:

1. He expects the overall market share of SUV to saturate at around 50% (as against 42% in CY 22)
2. This prediction is based on the data from other countries. (In evolved markets like Europe, SUVs account for 45% of the sales)
3. 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.