In a bid to keep afloat amidst depressing trends that have gripped the company for a long time now, Maruti Suzuki India Ltd, India's largest car maker, has decided to make a foray into the blooming sport utility vehicle (SUV) segment. The move comes at a time when the small car segment witnesses intense competition, which in turn is posing a threat to the position of Maruti.
According to a senior executive of the company, a concept based on the SUV will be unveiled in January at Asia's biggest automotive show, the Auto Expo 2012.
On conditions of anonymity the executive said, “The segment has grown significantly in the past few years and we want to have a presence there. It will take at least two years for the model to be production-ready. The details regarding engine and other specifications will be worked out soon.”
Another Maruti executive confirmed the news saying that the company is gearing-up to showcase a new concept at the expo. However, he did not assure that it would be an SUV. A company spokesperson remained tight-lipped on being asked about the plans.
As a matter of fact, the SUVs account for around 7% to 8% of the 2.5 million passenger vehicles sold in India, according to the Society of Indian Automobile Manufacturers (SIAM). Auto companies such as Mahindra & Mahindra Ltd and Tata Motors Ltd have complete control over the SUV segment. It is important to note that the rapidly growing SUV segment is expected to grow double its size in the passenger vehicle segment over the next decade.
Mahantesh Sabarad, Senior Vice-President, equity research, Fortune Equity Brokers (India) Ltd said that sales of the SUVs ought to go up, as the purchasing power of buyers is ascending with time. Moreover, such kinds of vehicles hold all the aces in the market and would undoubtedly emerge as a household name in the future. “SUVs are forming a larger chunk of the market. It will account for 15% of the total market in the next 10 years,” he added.
Maruti Suzuki, which is known for bringing out small cars in the market such as the Alto, the Swift and the WagonR, saw its passenger vehicle market share to drop to 40% in this fiscal. Last fiscal, the market share of the passenger cars was 45%. However, with auto makers thronging the small car segment of late, Maruti witnessed an unfavourable outcome.
As part of the company's intensive drive to get back on track, it has started to expand its portfolio in order to regain lost grounds. This year, Maruti came out with Kizashi, a premium sedan, which competes with the likes of Toyota Motor Corp.’s Camry and Honda Motor Co. Ltd’s Accord. It also imports the Grand Vitara, a premium SUV from its parent company, Japan’s Suzuki Motor Corp., on demand.
Thus, Maruti is tapping each and every possibility that would help in bringing back its unmatched momentum, using which it has topped the charts right from the start.
