Maruti adds 50 new outlets in June quarter

Most new showrooms in small towns and rural areas where company did not have presence

Eyeing a higher share of the domestic passenger vehicle market, India’s largest car maker, Maruti Suzuki, is further expanding its sales network. The Delhi-headquartered company, which already has the widest sales network in the country, added 50 outlets in the quarter ended June 30, 2015.

With the expansion, the number of Maruti sales outlets has increased to 1,670, covering 1,336 cities and towns. Notably, 90 per cent of the expansion has been done in areas where Maruti did not have presence earlier.

Most of the new outlets are coming up in semi-urban/rural towns which now account for one-third of the company’s sales. Volumes from rural areas grew a sharp 23 per cent last year, compared with total sales growth of 11 per cent. Some of the towns covered in the first quarter were Khalilabad (Uttar Pradesh), Kangra (Himachal Pradesh), Memari (West Bengal), and Banur (Punjab).

Unlike most other players in the domestic passenger vehicle market, Maruti has been aggressively expanding outlets. Last year, it undertook its biggest network expansion in a single year, adding 309 outlets.

Maruti closed FY15 with a share of 45 per cent in the domestic passenger vehicle market, where it sold 1.17 million vehicles. Along with exports, total sales last year were 1.29 million units, registering a growth of 11 per cent over FY14.

In the April-July period of the current financial year, it further expanded the market share to 47.5 per cent. The additional sales network presence helped the company grow its share.

A company official said the network expansion was in line with the target of a double-digit sales growth this year and a larger vision of achieving sales of two million vehicles by 2020.

The 50 outlets that were added in the first quarter do not include the showrooms being set up under Nexa, Maruti’s premium dealership. Nexa has been set to cater to buyers of premium cars. Maruti has around 40 operational Nexa outlets in 23 cities.

The number will go up to 100 outlets in 30 cities by March-end. At present, Nexa only sells the S-Cross, a crossover launched by Maruti early this month. S-Cross is not being sold through the regular 1,670 outlets.