Maruti plays bullish in Indian market; emerges as third largest UV maker in country

Thursday 14 June 2012, 00:16 AM by

Maruti Suzuki India Limited (MSIL), the largest car maker of India, has become the third largest Utility Vehicles (UV) manufacturer in the Indian auto industry by outpacing Tata Motors. The title was awarded to the automaker mainly because of surge in its sales, driven by Ertiga, which is the first Multi Purpose Vehicle (MPV) by company in domestic market.

According to reports released by Society of Indian Automobile Manufacturers (SIAM), the stake of domestic unit of Suzuki Motor Corporation in UV segment expanded eight times. The major increase in company’s sales was recorded in just two months of this fiscal, which ended in May 2012 that amounted to 16.7%.

The comprehensive sales of MSIL for April and May 2012 in MPV segment increased 10 times to 13,327 units from 1,317 units recorded in the year-ago period. According to Mayank Pareek, Chief Operating Officer, Marketing and Sales, Maruti Suzuki, since the launch of its Ertiga, the company delivered over 12,000 units and is bound to dispatch another 30,000 units against its bookings. In MSIL’s plan of selling 5,000 units a month, the company was engaged in manufacturing 6,000 units of Ertiga and has now planned to speed up its production potential.

Maruti Suzuki also exports Completely Knocked Down (CKD) kits of Ertiga to Indonesia, where the waiting period for the vehicle clocks two to three months. However, Pareek did not mention export volumes; rather, he said that the company has no plans to cut-off its exports as MSIL is witnessing problems to cope up with the increasing domestic demand.

The seven seater Ertiga squares off against Mahindra Xylo and Toyota Innova among others. Several UV manufacturers have lost their share in the market because of Maruti’s performance in the segment. UV segment is currently ruled by Mahindra & Mahindra, whose share in the segment drastically declined to 49.31% from 56.64% between April and May 2012. On the other hand, the share of Toyota surged to 20.08% from 14.9% when evaluated against the year-ago period.

Tata Motors, which was known as the third largest auto maker in UV segment, slipped in the market and was left with 7.87% market share, from 13.02% when compared with the same period last year. UV sales of the company declined to 6,267 units in the first two months of this fiscal, from the 6,866 units recorded earlier.

As per the classifications made by SIAM, the UV line-up of Tata Motors includes Tata Sumo, Grande Sumo, Safari, Xenon and the Aria. On the other hand, the company also counts Venture, a seven-seater commercial van, in the UV segment. A spokesperson of Tata Motors commented, “Our UV sales have been consistently growing.” Considering the monthly sales reports released by Tata Motors, the company’s comprehensive UV sales in April and May 2012 increased by 3%, amounting to 7180 units.

The Chief Operating Officer (COO) of Maruti Suzuki also mentioned that if the government made any regulations regarding additional duties on diesel vehicles, the demand for the same will contract. Addressing the hike in prices of petrol, he said, “All the hope is on diesel now.”

In spite of steep hike in petrol prices, weak economic sentiment and increased interest rates have shifted the focus of buyers from buying new vehicles, but the sales of 90% of the diesel fuelled UVs continued uninterrupted. Big players in this segment include Mahindra XUV 500, facelifted Toyota Innova and Maruti Suzuki Ertiga.

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