Siddharth Tak/Zee Research Group
India’s leading car-maker, Maruti Suzuki has lost market share in six out of seven cars it sells in the popular mini and compact segment in the passenger car market. Alto turned out to be the only model from Maruti stable in the category to register any growth during the last fiscal.
The mini and compact segment, which features popular models like Alto, Wagon R, Swift from Maruti, Santro, I10 and I20 from Hyundai, Indica from Tata Motors, and Spark from General Motors, currently comprises about 73 per cent of the total car sales in India.
The market share loss for Wagon R - for long the bread and butter model for Maruti - has been the steepest. Its market share declined from 12.15 per cent in 2009-10 to 10.55 per cent in 2010-11.
A ZRG analysis of data obtained from the Society of Indian Automobile Manufacturers (SIAM) showed a dismal performance by all major models from Maruti, including A-Star, Zen-Estilo, Swift and Ritz. A-Star market share in the category fell from 2.70 per cent in 2009-10 to 2.39 per cent in 2010-11.
Further, Zen Estilo’s market share fell from 3.49 per cent in 2009-10 to 3.38 per cent in 2010-11. Swift’s market share fell from 9.74 per cent in 2009-10 to 9.11 per cent in 2010-11. Similarly, Ritz’s market share fell from 5.29 per cent in 2009-10 to 4.45 per cent in 2010-11. Maruti 800, the car that sustained Maruti leadership in the early nineties and some part of the last decade, too witnessed a fall but this was easy to explain since the car was sold only in a limited number of cities in the country.
Maruti is open to admit to the numbers but keen to raise capacity constraint as the line of defence for decline in the market share. A company spokesperson said, “Many of our models in the category listed faced capacity constraints. These models are: Swift, Ritz, and Wagon R. Despite major productivity improvements, we could not make any more of these cars.”
Asked to specify the reason for decline in the market share for Estilo and A-star, the spokesperson claimed, “The market share decline for these models is very small. It is possible that some of their potential customers chose Alto, specially the powerful Alto K-10.”
The market, however, remained unconvinced of the viability of having so many models with low market share threatening to get even lower with the entry of several new models from competition.
Abdul Majeed, head, auto practice at PwC said, “Post liberalization auto market opened up to foreign automakers which have increased both the number of players as well as the competition in the market making it a case for survival of the fittest.”
Is it a case of too many Maruti models with little differentiator on offer? Harish Bijoor, brand-expert and CEO at Harish Bijoor Consults concurred, “Today is a high-clutter marketing economy. Even as we speak, there are 626 variants of cars in the Indian market. 32 more are slated to be launched over the next 12 months.”
He urged Maruti to focus back on getting its act on mileage and power back. “It needs to bring in snazzier models that are relevant, original and innovative in the Indian circumstance,” Bijoor suggested. Majeed endorsed the view arguing, “The fundamental R&D question for any automaker will be to choose the right technology, define the right targets in the right time frame.”
Maruti, however, is unfazed about the criticism. Maruti spokesperson opined, “For the past decade, our strategy has been to offer multiple models in the fast growing segments. This has helped to keep our overall volumes higher and our market share has been protected.” But the contribution of the non mini and compact set of models is there for everyone to see with models like Dzire doing well.