Maruti Suzuki, which sells one of two cars running on Indian roads, expects sales of passenger vehicles to expand in double digits in FY23, driven by strong consumer demand and improved chip supplies.
This will be a second consecutive year of double-digit growth for the market, which is likely to inch closer to the previous peak of 3.7 million units.
On its part, Maruti Suzuki would like to sustain a strong growth momentum of FY22 on the back of its biggest product offensive seen in recent years. That will see significant reinforcement in the SUV portfolio. It will be banking on a new range of SUVs – both below and above 4 metres in length – to regain lost share.
Reflecting on the current market demand and the potential of market growth in FY-23, Shashank Srivastava, Sr ED, sales and marketing, Maruti Suzuki, said for the current year, the company has seen a robust bounce back in demand. Despite supply side constraints due to the semiconductor issue, PV sales this year should be around 3.1 million units, translating into about 14% growth.
“This is still about 10% lower than the PV sales of 3.36 million in 2018-19,” he said. “The industry consensus seems to be volumes of up to 3.5 million units next year, but with caution regarding the factors of inflation, liquidity, Covid waves, supply side disruptions and high commodity and fuel prices.”
To be sure, Maruti Suzuki’s other rivals at the Look Ahead conclave of Society of Indian Automobile Manufacturers Association forecast continued double-digit growth in FY-23. Senior executives of Maruti Suzuki, Hyundai Motor, Tata Motor and Kia had forecast double-digit growth.
Shortages of semiconductors, a key component for new-age vehicles, had crimped automobile production globally. Maruti Suzuki lost about 90,000 units in production in October-December due to the chip shortage. The situation seems to be improving now, however, disruption still continues.
Srivastava said setting side supply-side constraints, demand in the market looks promising. The company sees healthy bookings and currently has an order book of 270,000 units.
As many as 3.08 million passenger vehicles were sold in the local market in 2021, increasing 27% compared to 2.43 million units sold in the year-ago period. Maruti Suzuki had a share of about 45% in the country at the close of last calendar year.
On the current market share, Srivastava explained, Maruti‘s market share in the non-SUV segment has been increasing in the last five years from around 55 to 66% this year. But the low share in the growing SUV segment has impacted the market share somewhat.
Declining to comment or confirm the future product plan, Srivastava added, “Since we have only two models in the crowded SUV space (with 46 models), we need to strengthen the SUV portfolio. We intend to do this in the near future.”
The company will be entering the fast-growing 4.2 metre SUV segment to shore up volumes and recoup market share.
The biggest excitement will be around its jointly developed SUV, codenamed YFG, with Toyota which will take on segment leader Hyundai Creta. The all-new Jimny may wean away some of the Mahindra Thar buyers. There is also a planned crossover based on the Baleno. Also on cards are facelifts and mid-cycle upgrades of the Ertiga and WagonR.
Already, the newly launched Baleno has crossed bookings of more than 35,000 units within a month of launch.
“If we leave aside SUVs, Maruti Suzuki has a share of 66% in the local passenger vehicle market. But SUVs now account for 39% of the sales in the country. There are 46 SUVs sold in India. Maruti Suzuki has only two models in this segment. We want to strengthen our presence in this category,” added Srivastava.
At present, Maruti Suzuki dominates the entry SUV segment with a share of 23%. However, it has a modest presence in the midsize SUV segment with a share of about 4-5%. This has dragged down the company’s overall presence in the category to 12-13%.
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The Indian passenger vehicle market leader plans to enhance presence in the SUV segment with new models from this year. However, it expects the hatchback market to be the largest volume contributor to the industry though by a small margin.
