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.