How Maruti is taking on Mahindra, Kia and Hyundai in SUV game
Premium- Maruti Suzuki is planning to replicate its highly successful product laddering strategy in the SUV segment
After a gap of almost three years, carmaker Maruti Suzuki's product pipeline has just kickstarted with an exciting line-up of launches over the next 2-2.5 years. It has launched upgraded Celerio, and mid-cycle refresh of Baleno as well as XL6. Going forward, Maruti Suzuki would be launching new models with four new SUVs, platform upgrade (Alto) and mid-cycle refresh (Brezza).
Four new SUV brands are lined up for launch over the next couple of years to plug-in the gaps in its portfolio. Based on brokerage Motilal Oswal's channel checks, Maruti is planning to replicate its highly successful product laddering strategy in the SUV segment, thereby giving customers an option of an SUV at every price point.
While the SUV based on Baleno platform will provide product laddering between Brezza and S-Cross, the SUV co-developed with Toyota will open up the UV1 segment (currently dominated by Hyundai Creta and Kia Seltos) and Jimny would compete in the niche segment of Thar. Further, it plans to launch a mid-size MPV sitting in between best-sellers such as Ertiga and Toyota’s Innova.
SUV, or the sports utility vehicle, are becoming the car of choice across consumer classes and geographies as well as for manufacturers for business growth. Maruti's market share in SUVs has been but it has set itself a target for growing this with new SUV launches in the coming years.
“Our analysis suggests that market shares in the PV segment are very highly correlated with the product lifecycles. MSIL benefits from its favorable product pipeline over FY14-19 with market share improvement of ~9pp to ~51%, benefitting from the launches of Celerio, Ciaz, S-Cross, Baleno, Brezza, Ignis, XL6 and Espresso," Motilal Oswal said in a note.
Subsequently, the lack of Maruti's product launches coupled with substantial product launches from competition led to a declining market share of 8pp to 43.4% over FY19-22 for the automaker.
While Kia ramped-up to 6.1% market share since entry in India in August 2019 with four new products. Conversely, Hyundai lost 260bp market share YoY (to 14.8%) in FY22 as it only had two model upgrades since Jun’20 along with Alcazar launch.
Tata Motors gained market share to 12.2% over FY20-22, driven by five new products since 2017. Mahindra & Mahindra gained 160bp market share to 7.4% (of the domestic PV market) since the launch of Thar in October 2021.