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Car market leader Maruti has begun the fiscal 2017-18 with some impressive performance in April. While the company secured Number One position in the UV segment, after displacing incumbent Mahindra & Mahindra, it has regained leadership position in the mid-size sedan segment after some temporary setback.
In April this year, Maruti’s UV volumes (excluding vans) stood at 20,638 units, up 29 per cent over April 2016 volumes of 16,044 units. Mahindra & Mahindra’s UV sales stood at 18,363 units, down 15 per cent over 21,484 units in last April.
Maruti’s blockbuster compact SUV Vitara Brezza continues to drive its volumes. Launched in March 2016, presently Brezza is the best selling utility vehicle in India with monthly volumes in excess of 10,000 units. It has a waiting period of more than three months.
“Maruti, which is relatively a recent entrant in the UV segment, is one of the key beneficiaries of the shift towards compact UVs where its presence is driven by Ertiga, S-Cross and Brezza (all in compact UV segment). It made considerable inroads during FY17. Temporarily, during Q2FY17, Maruti thumped M&M to become largest domestic UV maker,” according to Subrata Ray, Group Vice President – Corporate Rating, Icra.
In 2015-16, M&M and Maruti had market share of 37.9 per cent and 16.1 per cent respectively in the UV segment. However, in FY17, Maruti’s share zoomed to 25.7 per cent, while Mahindra’s share fell to 29.2 per cent.
UV segment accounted for one fourth of industry sales volume during FY17. With industry analysts projecting bright growth prospects for compact SUV market, Maruti hopes to maintain its sales momentum.
Also, Maruti is trying to consolidate its position in the mid-size sedan segment with its model Ciaz. After reporting lower sales than Honda City for a few months, Ciaz regained its position in April with higher monthly sales at 7,024 units (up 23 per cent) when compared with 5,948 units of City.
Ray pointed out that Maruti was able to competitively price its Ciaz sedan against Honda City by smartly availing incentives under FAME and lower excise duty for mild-hybrid technology and it was first mover in AMT transmission in India.
Though the Government has withdrawn its incentives from April 1, Ciaz has established itself as a premium sedan in the mid-size segment. Also, Maruti moved Ciaz to Nexa channel of sale recently. This is expected to further strengthen the brand image of the sedan.
Maruti and Honda had a market share of 39.8 per cent and 35.8 per cent respectively in the mid size sedan segment in 2016-17.
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