Maruti launches Stingray to swim out of demand slump

To cash in on the festive demand, the country's largest car manufacturer, Maruti Suzuki India (Maruti), launched a compact hatchback Stingray today. It has priced this sportier version of its WagonR between Rs 4.1- 4.67 lakh (ex-showroom, Delhi).

Mayank Pareek, chief operating officer (sales & marketing), says, "The initial response to the festive season has been good. During the first two days of Onam, festive sales have increased by around 20 per cent over last year. Sales won't be as euphoric as last year. But with the Stingray, we hope to attract young customers and boost volumes in these challenging times."

The Stingray, which is tagged higher than the WagonR by about Rs 20,000, will be sold alongside the existing WagonR. The car is powered by a 998-cc petrol engine and is available in three variants. Maruti will also roll out a CNG model in the near future. The Stingray is the ninth model in Maruti Suzuki's compact car portfolio.

"The launch of Stingray is in line with our strategy to provide new and refurbished models to our customers to create excitement in the market place. The Indian auto industry has been going through a slowdown, but despite this, customers continue to buy Maruti cars," says Kenichi Ayukawa, the managing director and chief executive officer.

Overall, Maruti has sold 1.3 million units of the WagonR since its launch in December, 1999. The average monthly sales of the car stand at around 12,000 units, on the back of discounts.

Pareek says the difference between the price of petrol and diesel has closed in, reviving the demand for petrol vehicles in recent months. "The share of diesel cars in overall sales has come down to 54 per cent in the first four months of this financial year as compared to 58 per cent last year. The slide in sales of petrol vehicles too have stopped. Over the next few months, sales of petrol cars should account for 50 per cent of volumes in the domestic market", Pareek informs. Demand for diesel vehicles, in the meantime, has declined by 12.5 per cent between April and July this financial year.

Given the current macroeconomic conditions, Maruti has, however, ruled out price hikes to offset the pressure on margins from the depreciation of the rupee. "In August, discounts were at a record high. Yet, car sales dropped by 7.4 per cent till July. Given the situation, there is no scope to pass on the burden to customers", says Pareek.

Maruti posted an increase of 5.80 per cent to sell 75,145 units in July. The growth has come on a low base, as production at the company's Manesar facility remained stalled in the corresponding period last year due to labour woes. Overall, passenger car sales in the domestic market fell for the ninth consecutive month by 7.4 per cent to 131,163 units in July this year.

Pareek says Maruti is also looking at the rural market to boost sales as the monsoon has been good across the country. "We are counting on the rural market as it has been a good monsoon so far. Currently, around 30 per cent of the company's sales come from rural markets," he says, adding that Maruti would try to reach out to more villages.