India's auto industry attracts global players like Honda and Suzuki for exports, with a focus on quality and cost efficiency. The country's emergence as a key manufacturing hub reflects its appeal to major auto manufacturers.
The small car market which garnered about 47% share of the total passenger vehicle (PV) sales in the industry during FY18 has dropped to about 28% in FY24. This comes on the back of the growing demand for SUV-style vehicles which has gone up tremendously during the past 3-4 years. However, Maruti Suzuki expects that by 2026-end or 2027, the market will again see a growth in the hatchback segment. The carmaker is prepping up to launch the new-gen model of its popular Swift premium hatchback on May 9.
The new swift builds on its sporty design which aims to enhance its dynamism and fun-to-drive quotient, the company said.
Maruti Suzuki India is aiming to sell about 2 million vehicles in the current fiscal, an 8.1% increase, outpacing the domestic industry. The company is betting on the launch of new models to drive growth, targeting a 10% rise in production. Maruti also plans to step up exports significantly and invest INR 1.25 lakh crore by 2030 to double output. The company's aggressive strategy aims to regain market share lost to rivals in recent years.
The Indian automobile industry is experiencing a surge in hiring for C-suite executives from diverse consumer-facing sectors to address a talent shortage at the top level amid a post-pandemic sales rebound. Over the past 12-18 months, senior executives from FMCG, consumer durables, and retail backgrounds have transitioned to carmakers like Maruti Suzuki, Bajaj Auto, and TVS Motor Company, traditionally known for hiring engineers and technology experts.
Maruti Suzuki's RC Bhargava expects small car market revival in two years post two-wheeler recovery, with EV production planned for European exports. Bhargava further says: "Maruti has avoided trying to give any kind of guidance on margins or profitability or any such thing. All I can say is that I am optimistic. The conditions in India are going to be favourable"
Maruti Suzuki's Chairman RC Bhargava shared that the costs of today's technology which goes into the Toyota hybrids is still quite high and Maruti's parent company Suzuki Motor Corporation is working on developing affordable hybrid technology for India. Talking about FY25, Bhargava says the car industry can look forward to a year which is "pretty good in all aspects". Maruti will start the production of its first EV in the current financial year.
Net sales of the company rose 19% to INR 36,697.5 crore in the three months to March 2024. Total expenses went up by 16.3% to INR 34,355.1 crore in the same period.
Revenue growth year-on-year to be supported by robust volume growth and increase in realizations. EBITDA margin to expand on better net pricing and scale. Key thing to watch out for is demand outlook, especially for rural/ entry level segments.
While compact SUV models - defined as per body type and ground clearance - are driving the surge in the overall passenger vehicle market on account of their larger share in absolute terms, bigger UVs are fast catching up.
India's preference for compact vehicles under 4 meters in length is declining, with their market share dropping from 62% in 2021 to 50% in 2023. The number of models in this segment has also decreased. Shifting consumer tastes, including a preference for larger vehicles, are prompting automakers to rethink strategies. The popularity of entry-level SUVs has grown, overlapping with premium hatches and sedans. New safety requirements and challenges in designing small cars are also affecting the market. Urban incomes and easy financing options are driving the trend towards premiumization.
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