Be it the strong brand pull, or just the lack of good alternatives in the car market, Maruti Suzuki is able to retain the loyalty of its customers.

Against expectations, those interested in the Swift and Dzire models (especially diesel models) have not shifted in large numbers to competitors such as Hyundai, Honda or Toyota, according to the August car sales data.

This is even as the over-a-month long production halt at Maruti’s Manesar plant extended the waiting period for car deliveries from three to about six-seven months and led to a 35 per cent drop in sales for the carmaker during the month. The facility makes the Swift, Dzire, A-Star and SX4 models.

Deepesh Rathore, MD at IHS Automotive India, said, “I don’t see any impact on the brand because of the labour problems. All a buyer cares about is getting the car on time.”

In terms of price and sales volume, the closest competitor to the Swift premium hatchback is the Hyundai i20. However, Hyundai sold 10 per cent less compact cars (Eon, Santro, i10 and i20) in August, compared with July. Honda saw Jazz sales drop 22 per cent in August against the previous month.

Toyota Kirloskar’s Etios, which is available in both sedan and hatch body styles and competes with the Dzire and Swift, gained 3 per cent in sales in August. Though Tata Motors’ Indica sales (Swift competitor) gained 5 per cent, Indigo sales (Dzire competitor) fell 29 per cent.

Rathore said that customers have not moved to other models as they have been waiting for the situation to improve. But, they may start losing patience soon, leading to the competitors gaining in the coming months.

“Competitors will only make minor gains, I think only 40 per cent of the customers may shift. However, Maruti should gain the lost market share in the next quarter,” he said.

Manesar plant’s closure led to market share loss for Maruti in July-August (from 40 to 38 per cent) and revenue loss of over Rs 1,400 crore. This is because the plant accounts for 40 per cent of total sales and mostly makes the diesel models, which are high in demand.

Though the company re-started production on August 21, waiting periods are not likely to reduce anytime soon as ramp up of output has been a slow process. At present, the factory makes less than a third of its full daily output of 1,900 cars.

(Tatas, Mahindras sales zoom: Page 2)

(This article was published in the Business Line print edition dated September 2, 2012)
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