FY2017: Maruti Suzuki Increases Its UV Market Share; Scooter Dominates Two-Wheeler Market

The 2016-17 fiscal was a positive year for India’s passenger vehicle market. Despite demonetisation and some regulatory challenges, the market grew at 9.2 per cent and achieved the milestone of 3 million units in a fiscal for the first time. However, among different segments, it was the utility vehicles (UVs) segment which really pushed the industry to achieve the staggering number.

The market for UVs grew at around 30 per cent in the fiscal, selling almost 750,000 units and accounting for one in every fourth passenger vehicle sold in the country. It wouldn’t be wrong to say that it was country’s largest automaker Maruti Suzuki which helped the segment to achieve such an incredible feat.

Maruti Suzuki’s popular compact SUV model Vitara Brezza is the flavour of the season. In the last year, it helped Maruti’s share in the UV segment to grow from 16.1 per cent to 25.7 per cent, a rise of almost 9 per cent.

Mahindra and Mahindra, the long-time undisputed market leader and still the biggest player in the UV segment lost its market share by around 9 per cent in the segment, mainly because of the new players that entered the UV segment.

Abdul Majeed, partner at consultancy firm PwC, said, “When compact SUV came in the big frame, there was a little delay on M&M’s end to offer great products.” M&M’s current market share in the UV space is around 29 per cent from around 38 per cent in FY16.

Maruti had last month informed that Vitara Brezza has crossed 110,000 units sales mark in the first year of launch and has pending bookings of over 50,000 units with waiting period of around 20 weeks depending on variant.

Kenichi Ayukawa, Maruti Suzuki India’s CEO and managing director, said, “Within a short span, Vitara Brezza has redefined the urban SUV segment in India.”

Like Maruti Suzuki, other players such as Hyundai Motor India and Toyota Kirloskar also saw a jump in their UV sales. Hyundai, the Korean automaker which sells the Creta SUV, saw a 52 per cent increase while Toyota, the popular Fortuner and Innova maker, witnessed a 34.5 per cent rise in sales in the segment. Together, they contributed around 25 per cent of all UV sales.

In the overall passenger vehicles market, Maruti Suzuki continues to stay ahead with a market share 47.38 per cent. Hyundai Motor also maintained its second position at 16.72 per cent while M&M’s market share came down to 7.75 per cent from 8.47 per cent in 2015-16.

Scooter Pushing Two-Wheeler Sales

The dominance of scooters in the Indian two-wheeler market got bigger in the FY2017. The share of scooters in the total domestic two-wheeler dispatches surged to 31.9 per cent in FY17 from 30.6 per cent a year ago. Share of motorcycle in the period fell from 65 per cent to 63 per cent.

Scooter sales in 2016-17 were at 5,604,601 units in comparison to 5,031,678 in the previous fiscal, up 11.39 per cent. Segment leader Honda Motorcycle and Scooter India posted 3,189,012 units during the year as against 2,789,537 in 2015-16, up 14.32 per cent. Scooter accounted for nearly 70 per cent of its total two-wheeler sales.

Chennai-based TVS Motor Co posted a growth of 6.81 per cent in its domestic scooter sales at 826,291 units as against 773,597 units sold in the previous fiscal, becoming the number two player in the category.

Two-wheeler market leader Hero MotoCorp dropped to third position with its scooter sales last fiscal at 789,974 units as compared to 818,777 units in 2015-16, down 3.51 per cent.

Experts say that scooter sales were less impacted by demonetisation as it has a big market in urban centres unlike bikes sales which are popular in rural centres and transaction mainly takes in cash.