Maruti contributes to 50% of Suzuki’s Global Volumes!

Maruti Suzuki India sold over 14.85 Lakh units in the year 2019. While the parent; Suzuki Motor Corporation sold over 30 Lakh units globally. The contribution of Maruti Suzuki to Suzuki’s global volumes was 49.4%. This signifies the importance of Maruti to Suzuki! Maruti off-late has been playing an extremely vital role in Suzuki’s R&D. Also a lot of Suzuki’s models are specifically made in India and then exported to different parts of the world. Also note that Suzuki is not present in the World’s 2 biggest markets – US & China which it had exited owing to low sales and heavy costs. This has made Suzuki concentrate more on the Indian subcontinent to sustain its volumes. Maruti has been the clear leader in India and was able to garner >50% Market Share in 2019 as well even with the challenges of BS6 transition and fading volumes.

No other automaker in the world’s vehicle markets has ever matched Maruti Suzuki’s stranglehold in India. Nor has the gap in market share between the top-two players in any individual market been as wide! Studying the 10 Global automobile markets (basis 2019 volumes); the only OEM that is similar to Maruti Suzuki is Toyota in Japan – where Toyota is No.1 player with a market share of 27%-31%. Also No.2 Honda captures a market share if 12%-16% in Japan. However, the Market Share variance between these two Japanese OEMs in their home market was smaller than that of Maruti Suzuki and its closest competitor (Hyundai) in India.

Top 30 OEMs Globally Basis Year 2019 sales –

  • VW Group emerged as the World No. 1 auto maker for 2019 and grew 1% YoY.
  • Toyota came in close second and was just 2.33 L units behind VW.
  • Tata Motors ranked 22nd in the list. However the YoY degrowth was the highest at -23%. Also note that JLR too was close and ranked 23rd.
  • Other Indian OEM in the list was Mahindra and YoY degrowth was second highest at -12%. M&M ranked 27th in the list.

Source: CarIndustryAnalysis

M&M is slowly losing the UV race

Mahindra’s Market Share in Utility Vehicles used to be as high as 55% (FY2011-12); but in FY 2019-20, it has more than halved to 19%. M&M has lost over 5% Market Share in the UV segment in the last FY itself – The UV Market Share dropped from 23.8% in FY 2018-19 to 18.7% in FY 2019-20. The bigger matter of concern here is that the OEM has lost Market Share even after the launch of products like Marazzo, XUV300 & Alturas in the past 1-2 years timeframe. So what happened in these years that Mahindra is losing the game that it mastered?

M&M understood the Indian landscape well and its products like Bolero & Scorpio are still sought after in rural markets. It did create a stir in the urban cities with XUV500 and  there was a time (in year 2011) where Mahindra had to stop bookings for the XUV500 where it garnered 8,000 bookings in just 5 cities where it was initially launched (Mumbai, Delhi, Bangalore, Chennai & Pune). But over the years; Mahindra lost the sheen with XUV500 and it had missed the bus in rolling out a sub-4m Compact SUV on time. We don’t count the launch of Quanto / Nuvosport as it was never an indigenous product from Mahindra’s stable – rather was a shortened Xylo of sorts. Even the XUV300 which came in 2019; was based on the Tivoli platform but the length was compromised to fit in sub-4m range – And; was priced comparatively higher to peers as well. The previous 3 launches from Mahindra’s – Marazzo, XUV300 & Alturas was launched with the intent to gain an ‘incremental’ volumes of 8,000 to 9,000 units per month; but are not able to bring even half of those numbers currently.

The likes of Maruti & Hyundai learnt from the mistakes of M&M and carefully drafted launches in the segment with much more market research and consumer study. Do note how even Hyundai joined the party late with Venue and launched it in May 21, 2019 – But; it ticked all the boxes customer wanted in the segment and Venue also emerged as the 2nd Best Selling SUV for FY20! (link).

  • Maruti retained the Top Spot as India’s largest Utility Vehicle maker in FY 2019-20. The launch of XL6 in the previous fiscal bolstered Maruti’s position as the No.1 UV maker. However; it lost -3.5% Market Share in FY20 v/s FY19.
  • Hyundai gained big in UVs with the launched of Venue. Hyundai’s UV Market Share shot up from 13.7% in FY19 to 18.8% in FY20. Hyundai even pipped Mahindra to emerge as India’s second biggest UV maker.
  • Mahindra lost the highest market share in UV segment and now slipped to Rank 3. FY21 shall be even more crucial as a lot of new UVs are planned to be launched from other OEMs.
  • Kia emerged as the dark horse and overtook the likes of Toyota in UV Market Share in the first year of operation itself! It now holds an envious market share of 9.1% in UVs. Also both the launches from Kia were in UV segment itself (Seltos, Carnival).
  • Toyota’s market share loss was the second-highest in FY20 (after Mahindra). The Japanese major lost -3.7% Market Share in UVs in FY20 v/s FY19.

Sedans – The worst hit segment of FY2020

The Three Box Car / Sedan was said to be a status symbol in India and had got a lot of aspiring buyers upgrading to sedans either as a first time buyers; or progress from a hatchback. The aspiration led to the birth of new segment like Sub-4m Compact Sedan and was offered at a competitive price. Many a times it was observed that the likes of Dzire used to outsell the highest selling Alto as well. A lot of investments and new launches in the segment was done over the years and every OEM had an entry in the segment in one form or another. However; the segment has been losing out to Premium Hatch / SUVs and is losing volumes in a staggered manner. In FY2020 too; the volumes in the segment dropped -37% when compared to FY19. Almost all models in the segment registered a double digit degrowth. No new launches were done in the previous fiscal as well. Infact; a whole bunch of discontinued models are from this segment (Linea, Etios, Corolla, Accord).

  • Maruti’s Dzire was the best selling Sedan of FY20 – but; the YoY degrowth was a hefty -29%.
  • Honda’s Amaze came in second. Do note that the difference in Dzire and Amaze volumes is over 1.21 Lakh units! In fact; Dzire sold over 3 times the second in place Amaze.
  • Among the executive sedans; Ciaz topped the list and ranked 4th in terms of overall sedans sales.
  • The difference in City & Verna sales was a meager 18 units! The competition between Ciaz, Verna & City has always been interesting.

MUV Sales in India for FY2020

Apart from the SUV’s, any other segment which is making a lot of buzz in India – It’s the MUVs. The family mover MUVs has garnered a lot of attention in the recent times and the OEMs are making entry at all ends of the segment – In 2019-20; we saw Renault venturing in the entry level with its Triber and Toyota raking up all the way to the high-end premium price point with the Vellfire. Kia’s second offering ‘Carnival’ too made a grand entry into the Indian market and price wise was pitted higher against the likes of Innova as well. We would rather say that India now has a a choice of matured MUVs at all possible price range! The efforts were positively reflected in sales volumes too – The MUV segment managed to grow 1% in FY2020 v/s FY2019.

  • The Ertiga + XL6 combo sold over 1.12 Lakh units! Do note that this number is higher than the number of Brezza’s sold in the same timeline. This highlights how Ertiga / XL6 has made an impact in the segment and is gaining good volumes too.
  • Mahindra’s age old workhorse Bolero managed to rank 2nd due to strong affinity in rural market. However; the model sales dropped -30% YoY due to the BS6 transition and updated CAFE norms.
  • Renault’s Triber impressed us all with its frugality and offered an extremely value-for-money proposition at the price point. The model turned savior for brand Renault in previous fiscal and also emerged as the 4th best selling MUV.
  • Carnival’s 3 months sales outsold the overall year’s sales of Hexa! Kia started dispatches of the Carnival in Jan’20 and the overall dispatches in the past 3 months was 3,187 units (average of over 1k / month).