Maruti Suzuki, the largest carmaker in India, has been lacking a strong SUV portfolio despite the market's increasing inclination towards them. This is reflected in its market share, which dropped from around the 50 percent mark in 2018-2019 to 43.65 percent by the end of FY2021-22 (April 2021-March 2022). It has now decided to regain lost ground with an onslaught of new SUVs.
While the whole automotive industry bore the brunt of the supply chain crisis and after-effects of the pandemic – another key reason for Maruti's decline – rival carmakers, at the same time, were slowly but steadily gaining market share on the back of SUVs (Tata Motors and Mahindra are the biggest examples).
Maruti Suzuki has traditionally been a strong player in the small car segment, but it is now moving out of its comfort zone hoping to make a dent in the large and premium SUV segments.
Maruti Suzuki’s foray into SUVs driven by volumes
It’s no secret that Maruti Suzuki’s success in practically every segment it operates in is primarily driven by volumes, be it hatchbacks, compact sedans or even MPVs. However, in the latter part of the last decade, customer preferences have shifted from mass-market hatchbacks and sedans to bigger and more premium SUVs.
SUVs now command over 40 percent of the total market share, which indicates that the bulk of the market has now moved up in terms of price and positioning. “SUVs aren’t cheap products, they are an expensive proposition for the Indian market,” says Hisashi Takeuchi, managing director and CEO, Maruti Suzuki India, speaking to Autocar India. “But people are still buying high grade cars with more features. So, the market dynamics have totally changed.”
Maruti Suzuki's experience with upmarket and expensive models has been rather mixed in the past. To this, Takeuchi responds: “Maybe our organisation was not so ready [earlier] for this challenge and the market was also not ready to accept those products with volumes.”
However, Takeuchi admits that the midsize SUV segment is now a “huge market showing huge growth potential”. He feels that it is “good timing” for the carmaker to finally foray into this space.
Even though the upcoming Grand Vitara is a hybrid, volumes will still be a key for its success. “If we can generate a bigger volume, then that will be key for the success of the product,” says Takeuchi.
Maruti gunning for 50 percent market share with SUVs
Currently, the carmaker banks heavily on the Brezza SUV, which constitutes just 13.5 percent of the overall SUV market. This is miles away from the dominance the carmaker is used to in other segments. When asked about what volumes the company is looking at with the upcoming Grand Vitara, Takeuchi says, “We’re happy if we can reach 50 percent market share.”
That’s an ambitious task for Maruti Suzuki given the fact that diesels still constitute a big chunk of the midsize SUV segment, and having arrived late to the party, Maruti Suzuki will essentially be playing catch up with more established players in this space.
However, even Takeuchi is wary about the challenges ahead and said, “There are 56 competitor models available in the SUV space in India, and now, with the Grand Vitara, we have only two out of 57. So we still need to expand our portfolio in the SUV space if we seriously want to increase our market share close to 50 percent. But that will not be such an easy task.”
Maruti Suzuki still has a huge backlog of orders with nearly 3 lakh cars waiting to be dispatched to customers. Clearing this backlog will also be key in gaining back some market share, reckons Takeuchi. “Now the issue is how we can increase the production capacity and supply to those backorders, with many being for the Brezza. It's the same for the Grand Vitara too. Our challenge is the chip shortage issue, electrical component issue, and how we can produce enough quantity,” says Takeuchi.
Slew of new Maruti SUVs on the horizon
“We have been behind our competitors because we didn’t have good products to sell,” acknowledges Takeuchi, but that’s about to change soon. The Brezza already received a comprehensive update a couple of months ago, and upon launch, the Grand Vitara should be a formidable contender in the midsize SUV space for being the only hybrid SUV in its class.
Both models are also very well packaged, asserting Maruti’s move towards more upmarket and premium cars.
But that’s not all, as we recently reported to you with spy shots of Maruti’s coupe-styled crossover that’s internally referred to as the Baleno Cross. Likely a production version of the Futuro-e concept, the new SUV-coupe is expected to be based on Maruti’s Heartect platform and will be powered by one of Suzuki’s BoosterJet turbo-petrol engines. It will hit the market in February 2023 after its global debut at the upcoming Auto Expo in January 2023.
Maruti’s much-awaited 5-door Jimny is also in the pipeline. This, too, will be a niche offering as a hardcore body-on-frame off-roader and is expected to break covers at the 2023 Auto Expo.
Additionally, the carmaker is also said to be working on a premium, three-row SUV that will be the brand’s flagship model in the coming years. There is little information on this mystery SUV, but industry sources speculate that it is a Hyundai Alcazar rival that could be based on the Ertiga’s flexible platform.
Having an SUV in each segment could be the key to success, reckons Takeuchi. “We should have an SUV in every segment, and we should be achieving 50 percent in each of these segment in India, then we can eventually reach 50 percent overall. That is my strategy,” says Takeuchi.