India’s share in Suzuki Motor Corporation’s (SMC) worldwide automotive sales ended at 50.35 percent last financial year reporting sales of 1.43 million units. A year ago, it was 52.72 percent.
Growing influence of its neighbours and the cyclical slowdown saw India report its lowest share since 2016 in Suzuki’s global automotive sales during FY20.
India’s share in Suzuki Motor Corporation’s (SMC) worldwide automotive sales ended at 50.35 percent last financial year reporting sales of 1.43 million units. A year ago, it was 52.72 percent.
This is also the lowest in four years as the share in 2016 stood at 49.52 percent.
SMC is the parent company of India’s largest carmaker Maruti Suzuki, which is also the single largest volume generator for the Japanese giant. India generates more than twice the volume generated by SMC’s home market Japan.
India’s decline in SMC’s share is the first is many years as Maruti Suzuki witnessed its worst sales erosion of recent years. Its FY20 domestic sales pushed it back to FY17 sales level as heightened competition, higher insurance costs, new regulations and phase out of model variants impacted demand.
India’s 18 percent decline in volumes in FY20 comes after comparatively better performance by the Indonesian market which has now the third biggest market for SMC globally. SMC sales in Indonesia declined by 6 percent last year.
Pakistan, which was the fourth biggest market for SMC in Asia and one of the largest globally, saw its volumes come under pressure due to a weak economic growth and rising costs. While Pakistan volumes were higher than Indonesia’s in FY19 they slumped in FY20.
Suzuki India’s automotive sales were 16 times bigger than its sales in Pakistan, as per data provided by SMC.
However, other smaller markets such as Philippines, Myanmar, Thailand have chipped away India’s share in SMC’s sales. Even volumes in Europe did comparatively better than India’s in FY20 for SMC.
Way forward
Despite the disruption caused by Covid-19 SMC is charting an aggressive way forward in India. This entails tripling of showrooms that will mostly come up in non-metro areas and planning new products that will maintain or boost its share in each segment.
“Currently, our company has more than 3,000 outlets throughout India. In Japan, we have about 900 outlets. The population in India is 10 times larger than that of Japan, so India theoretically needs 9,000 outlets, which means that we still need 6,000 outlets more. In particular, instructions were given to establish small outlets to be built mainly in rural areas, and although the numbers are steadily increasing, it is still far from enough”, said SMC executives talking to analysts.
Maruti Suzuki ended last fiscal with a domestic market share of 51 percent. SMC is aiming to keep the share at the same level though the level competition will increase manifold thanks to an aggressive product pipeline of Kia, Renault, Volkswagen and Hyundai.
“We need to secure a 50 percent share in each of segments A, B, and C, so we believe that product planning is still insufficient. We place our efforts on these areas. In any case, our target of “Securing 50% market share in India” remain unchanged and we will steadily proceed to achieve the target”, SMC executives added.LIVE WEBINAR: Tune in to find out how term insurance can provide risk protection during tough times. Watch Now!
