Maruti Suzuki seeks to ride the SUV wave to exceed 50% market share
According to a senior company official.
The nation’s largest automaker, which saw its market share drop to 43.38% in FY22 from 47.7% in FY21, aims to offer multiple SUV products by putting emphasis on new technologies such as hybrid powertrains to improve fuel efficiency, making them comparable. or better than the diesel-powered models that are currently being sold in the market, especially by its Korean rivals.
With no plans to make a comeback in the diesel segment, MSI is also focused on increasing its presence in the CNG segment to bring in additional volumes.
The company held a market share of 51.22% in 2018-2019 and 51.03% in 2019-2020.
In an interaction with PTI here, MSI’s Senior Executive Director (Marketing and Sales), Shashank Srivastava, noted that the company will do whatever it takes to regain lost market share.
“It’s a battle cry…it’s there in our organization…it’s like constructive paranoia…which means you can’t rest easy…it doesn’t take a lot of time for market dynamics to change, so we’re still on our toes on how to improve efficiency, productivity, etc,” he noted when asked about the company’s thoughts. company to regain 50% market share.
Srivastava said that in the non-SUV segment, the company’s market share was 67%, with leading positions in the sedan and minivan segments.
He acknowledged that the lack of products in the fast-growing SUV segment had impacted his overall market share.
Elaborating on segment dynamics, Srivastava noted that while the company led the entry-level SUV segment with Brezza, it was only in the robust growth mid-size SUV segment where it lagged. competition with a lukewarm response for S-Cross.
“So overall, our market share in the SUV vertical is only 12%. This is where we are now making efforts to build our presence,” Srivastava said.
He noted that while the company struggled to perform below par in the segment, some of the competing companies were getting up to 60% of their SUV sales.
When asked if the lack of a diesel powertrain option could also be part of a low vertical market draw, with competitors already offering their products with gasoline and diesel powertrains, Srivastava replied with the negative.
He pointed out that the share of diesel vehicles has dropped drastically to around 18% from highs of 58% a few years ago.
“In sedans it’s less than 0.5%, in sedans it’s around 1.5%, in minivans it’s down to 20%, so overall it’s 18% , which comes from mid-size SUVs. In this segment, we believe that diesel is accepted because it lacks a good gasoline-powered vehicle,” Srivastava said.
Citing the example of Brezza, he noted that in the entry-level SUV segment, the share of diesel versions used to be around 88%, which has now fallen to around 20%.
“We stopped the diesel and brought Brezza with 1.5 liters of petrol…it suddenly changed the dynamics and 88% became 20%…we think this will also happen in the middle of SUVs… “Srivastava said.
He noted that in the hatchback segment it was an undisputed leader with a dominating market share of 70%, while in the minivan segment as well it was ahead with its market share rising from 35% in 2019 at 61% last year.
Asked specifically about the entry-level hatchback segment, Srivastava noted that of the industry’s total of 16-17 hatchbacks, seven were owned by MSI.
He noted that the company will continue to rejuvenate the segment’s products in the future as well, as it remains the biggest volume generator for the auto major.
Srivastava also hinted that the company could offer models, depending on the segment, with powerful hybrid powertrains.
“It’s possible. While I can’t comment on what we’re actually doing, it’s a very logical thing,” he said when asked if MSI products could see a systems transition. mild hybrids to strong hybrid technologies.
Srivastava said affordability was a big issue and there was a cost associated with powerful hybrid technology.
“So we have to be very careful in which direction we have to go,” he noted.
Srivastava noted that transitioning from hybrid technology, which includes both an internal combustion engine and a battery, to pure battery electric vehicles could be a better option for India which currently lacks charging infrastructure.
“There is an industry consensus that electric vehicles will become mainstream in the future. However, there is no consensus on when that will happen…analysts say that by 2030 10-12% of sales will be electric vehicles…you can’t wait for it to become 100% to take care of the environment.. so what happens.. one is of course to make engines more efficient and the other thing is to have a hybrid that is cheaper to acquire than EVs…and that’s the transition we’re talking about…that could well be the path to electric,” did he declare.
Srivastava said the focus on hybrid technology could also help reduce the cost of local production of several electric vehicle components.
“If you want to reduce the cost of electric vehicles in India, you need to have a localization. There is some similarity in the components used in the powerful hybrids as well as in the electric vehicles. So if you have a larger volume, the localization can improve,” he said.
The problem with electric vehicles right now is that volumes are low with sales of around 16,000 units last year, which is only 5% of overall passenger vehicle sales, Srivastava said while hoping some push for the segment, like electric vehicles, from policy makers.
MSI plans to launch several electric vehicles, with the first expected to hit the market in 2025.
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)