Q. Fiscal Year 2020 has been a record year for the automotive industry, and also for Maruti Suzuki. How do you see the fiscal year 2024? And what are your milestones to cross?
We saw record levels of sales in 2022-2023. In fact, the sales were almost 3.9 million, which compares very well with the previous high of 3.37 million, which was in 2019. So pretty good and strong numbers last year.
This year, in 2023-2024, the projections in the industry seem to be around 4.05 million to 4.1 million, which translates into a growth of about 5% to 7%.
Q. How does Maruti Suzuki plan to make a comeback in the SUV segment? What are your plans in the SUV model space? Can we expect the arrival of many more models?
In the non-SUV space, Maruti Suzuki’s market share is about 65%. But for SUVs, our market share in 2021-2022 was just 10.2% or so.
So while it’s 65% for non-SUVs, it’s only 10.2% for SUVs. And when you combine the two, the market share falls below 45%.
We have a medium-term objective of getting to 50% market share. And therefore, with a very high market share of 65% in the non-SUV space, we need to increase our market share in the SUV space.
And 10.2% was not good enough. We had only one model, the Brezza. And while the Brezza is a class-leading vehicle in the entry SUV segment, we had no mid-SUV car, which is why we introduced the Vitara in September last year.
In the past six months, we have touched about 50,000 sales, despite the challenges of availability, etc. But the thing is, there are a total of 46 models in the industry in this space, and we had only one. So obviously, we had to reinforce our portfolio. Because with one or two models, we will not be able to achieve our target market share. So we introduced these two models, Fronx and Jimny.
With these four models, we hope to increase our SUV market share to around 25% from last year’s level of 10%. In 2020-2023, our market share was about 13%. But in Q4, with better availability of the Brezza and the Vitara, our market share increased to close to 17.5%.
Q. What is the target group for Fronx? Who will buy it for its overall features?
Fronx operates in the entry SUV space, the compact SUV. It’s a four-meter vehicle just like the Brezza. So that space has become very large. In fact, it’s the largest sub-segment in the industry. It was about 22.50% of the industry last year. This segment sold about 8,72,000 units, so it’s pretty large. And what we found is that when volumes become large, sub-segments emerge within a segment and our research showed that two strong sub-segments have emerged in the SUV space.
One is the lifestyle and slightly more niche off-roading type of SUV customers. Jimny is for them. Another large sub-segment is the urban young, technology-savvy buyers. We call them trailblazers in the sense that they want more features, more technology and something which is modern, futuristic, and at the same time has that freshness. Fronx is for them.
Q. What are your expectations from Fronx? How much it can contribute to the total sales of Maruti Suzuki?
I’ll give you some numbers and we don’t have a particular number in mind for Fronx, like any new vehicle, which we have launched. After we have the sale we see what is the trend and then accordingly decide what the volume levels would be.
Last year, 2022-23, we sold about 202,000 SUVs. Next year we are projecting the overall SUV segment to be about 19 lakh. For us to be the number one in the SUV segment, we need to get to that 25% share, about 4.75 lakh SUVs.
Currently, we are doing about 40,000 SUVs a month, about 15,000 units of Brezza and 10,000-12,000 units of Grand Vitara. After the fresh inflow of consumers, you can do your own calculations.
Q. How does Grand Vitara perform in the market?
We lost a lot of volumes of Grand Vitara because of the semiconductor issue. However, we sold over 50,000 units in the last six months. We have bookings for 1,44,000 units. Because of the production issues, we could not justify the sales of Grand Vitara. However, selling 50,000 units in six months is reasonably good. We hope to have a decent supply of Grand Vitara, though, for the next two quarters, it looks difficult.
