Maruti targets sales through Nexa outlets to overtake peer volumes

Maruti Suzuki India is targeting for its premium vehicles sold through the Nexa retail outlets to be more than the respective overall sales of Hyundai and Tata Motors by next year, according to Senior Executive Officer, Marketing and Sales, Shashank Srivastava.

The Nexa retail chain, started in 2015 to sell Maruti Suzuki's premium vehicles, has crossed the cumulative sales milestone of 20 lakh units. It currently sells models such as Baleno, Ignis, Ciaz, XL6 and Grand Vitara. Upcoming SUVs Fronx and Jimny will also be sold through the chain.

The company, which has decided to increase prices of its vehicles from April, feels that response of consumers to the increase in vehicle prices by auto manufacturers to meet regulatory requirements needs to be watched out for, although it expects passenger vehicle sales to grow between 5 per cent and 7.5 per cent in FY24.

"We have completed the two million mark for the Nexa. The first million came in four years, the next million has come in three years, despite the fact that we have had in the last three years, a little bit of a disturbance in the business environment because of the COVID-19," Srivastava told reporters in a virtual interaction.

He further said, "We are hopeful that next year, Nexa which is currently number four in the industry, we hope to make it the second largest brand in the auto industry next year."

Maruti Suzuki sells its mass market models through the Arena chain while Nexa retails its premium models.

Nexa chain accounts for about 23 per cent of the company's overall sales this year and has grown around 47 per cent. On a standalone basis Nexa has a market share in excess of 10 per cent overall in the domestic passenger vehicles industry, Srivastava added.

"We expect (Nexa) to close this (fiscal) year at around 3.7 lakh units against 2.55 lakh units that we did last year...We hope to sell larger numbers next year with the Fronx, the Jimny (coming in) and the full year effect of the Grand Vitara. Next year, thanks to these new models, we are expecting the sales to be even higher, maybe close to six lakh units," he said.

At present, he said, Nexa sales volume is fourth behind Maruti Suzuki's Arena, Hyundai and Tata Motors.

In the April-February period this fiscal, Maruti Suzuki's total domestic passenger vehicles (PV) sales stood at 14,74,107 units as compared to 11,97,697 units in the year-ago period.

On the overall PV industry sales growth prospects, Srivastava said, "The industry growth is expected to be somewhere in the 5 per cent to 7.5 per cent range. This year, it is expected that the industry sales will close at around 3.89 million, that's a growth of almost 26 per cent over last year's 3.07 million. So on this base of 3.89 million, we expect actually the volumes next year in the industry to be between 4.05 million to 4.1 million units."

However, the growth would depend a lot on the country's economic growth, monsoon pattern and its impact on the rural market, increase in interest rates, liquidity levels and the impact of price hikes undertaken by automobile manufacturers to meet regulatory requirements on demand, he said.

"There are red flags which we are watching at the moment, though in balance it appears that the growth would be about 5 to 7.5 per cent," he said, adding as for Maruti Suzuki "we would expect our growth to be higher than the industry".