Maruti grabs pole position in newer segments

Company tops in compact SUVs, premium hatchbacks and cross-overs, displaces established models of Ford and Hyundai

Maruti Suzuki, India’s largest car maker, has grabbed pole position in three of the four new segments it entered after sustained efforts of raising production and continued marketing push.

The Delhi-based company has come out tops in the compact sports utility vehicle (SUV), premium hatchback, and cross-over segments, displacing the established models of Ford and Hyundai.

Maruti's Vitara Brezza (SUV), Baleno (premium hatchback), and S-Cross (cross-over) outsold Ford EcoSport, Hyundai Elite i20, and Hyundai i20 Active in the respective segments in April. This marks a significant shift for Maruti Suzuki, which has been struggling to achieve a breakthrough in segments other than the affordable compact (sub-4 metre) car segment where it sells Alto, Wagon R and Swift.

The Brezza clocked 7,832 units in April against 3,779 units of EcoSport. Similarly the Baleno, which is carrying a waiting period of nearly six months, sold 9,562 units higher than segment leader Elite i20, which clocked 9,400 units in the same month. The Baleno has unserviced bookings of around 55,000 units.

Randhir Singh Kalsi, executive director (marketing and sales) at Maruti Suzuki, said, “We had outlined at the launch of Baleno that we aim to achieve market leadership in the premium compact segment over a period of 12-18 months. We are confident that we will able to maintain the present run rate of 8,000 units for Baleno.” While the Hyundai Elite i20 faces heat from the Baleno, the Vitara Brezza has snatched customers of rivals. Volumes of the EcoSport dipped by 3,779, while that of Mahindra TUV300 closed April at 1,900, which was less than half its monthly average since its launch in September 2015.

According to Kalsi, Brezza's unserviced bookings stand at 50,000 units now, which translates into a waiting period of six months, considering an average monthly run rate of 7,500 units. Other Maruti models are not too far behind. Multi utility vehicle Ertiga has closed the gap with segment leader Mahindra Bolero, while the mid-size sedan Ciaz is closing in on segment best-seller Honda City.

There was a sharp decline of nearly 20 per cent in Bolero volumes last year, which is the biggest volume generator for Mahindra & Mahindra, while City volumes came under pressure as demand swung in favour of petrol from diesel, leading to gap in supplies.

Ciaz narrowed the gap with City to 91 units in April against a minimum of 1,000 units seen in previous months. Similarly, from an average lead of 1,400 units of the Bolero a month in 2014-15 it shrunk to 148 units in 2015-16 compared to the Ertiga.

Whether Maruti will be able to achieve leadership position in MUV and sedan segments will depend on its ability to produce them besides the issue of generating retail demand. The company has been facing production constraints by operating above 100 per cent capacity and is making efforts to de-bottleneck its production lines at Gurgaon and Manesar.

“We are making all possible efforts to enhance capacity of the Brezza and Baleno. It takes time to ramp up. While deciding initial capacity generally the sales of existing players in the segment are considered as an indicator of potential demand. However, actual demand from customers for Baleno and Brezza has been much higher. We should be more comfortable by the second quarter of the year. Our vendors are also ramping up to meet this demand,” added Kalsi.