TOI-India’s largest carmaker Maruti Suzuki continued to lose ground in 2012 when its market share slipped to a new low because of factors including declining sales of entry-level petrol cars, increasing competition and, mostly, labor trouble at its Manesar plants.
Company officials and most analysts attribute the slip in Maruti’s market share to 37.76% in calendar 2012, down from 44.64% in 2010, to violent labour troubles at Manesar, but some also point to the falling demand at the firm’s stronghold of entry-level macro car segment as customers turned to diesel-powered cars on rising petrol prices.
Mayank Pareek, COO (marketing & sales) at Maruti Suzuki, said the sudden spurt in demand for diesel vehicles was unexpected. "The dynamic shift towards diesel surprise us, but we gradually managed to fill the gap and outsourced the technology to cater to this increased demand," he said.
The top carmaker did not miss the diesel rush though, with its Swift hatchback and Dzire sedan remaining the most-loved diesel cars, occupying the second and third slot in the list of top-selling vehicles of 2012. Maruti’s new Ertiga multi-purpose vehicle too had a great start, emerging the country’s second-highest sold utility vehicle of the year.
But Maruti could not meet the demand for these vehicles partly because the labour unrest forced a month-long lockout at its twin plants at Manesar. Diesel models of Swift and Dzire, in fact, command a premium with customers waiting for weeks to get deliveries.
A bigger problem in 2012, though, was falling demand for micro cars such as the Alto, WagonR, Ritz and Zen Estilo. Alto, the country’s top-selling car, reported a 8% fall in sales, while WagonR slipped to fourth in the pecking order, down from being second in 2011, with 8.5% dip in sales.
Despite the slide in market share, however, Maruti Suzuki still enjoys a huge gap over the second-largest player Hyundai Motor India. "We still have four cars in the top five models sold in India," Pareek said.
And, with some revival in demand for petrol cars of late and Manesar plants resuming normal operations, Maruti is hopeful that it can improve its market share to around 40% this year with the backing of some new launches and a slew of makeovers to excite customers throughout the year.
Maruti is targeting to woo younger customers with its new XA Alpha compact SUV, to follow up on the success of the Ertiga and to cash in on the rush for sports utility vehicles in the country. New offerings in this segment such as Renault Duster and Mahindra XUV500 have been big hits among young Indian consumers.
An analyst tracking the company say that Maruti Suzuki has the potential to maintain its leadership position for a long time, but may need new cars and models to revive its share in the face of increasing competition.
"Maruti has managed to retain its edge even as it was engulfed in a series of erratic problems in past two years," Jai Sharda, managing partner at independent research firm Equitorials, said. He said the carmaker’s recent launches have been huge success with the exception of the new Alto 800.