Maruti Suzuki: Cruising Swiftly

As on 28 february, Maruti Suzuki India, the country’s largest carmaker, had sold over 13 lakh units in 2016-17, almost 11 per cent more than the comparable period last year. Maruti Suzuki proudly states that today, the company manufactures 1.5 million family cars every year — that’s one car every 12 seconds. And all this in a rather challenging market that has been tackling the slowdown in car sales for the past several months.

In the last four years in particular, Maruti Suzuki has witnessed sustained growth led by the introduction of several new models and variants of existing car models. The launch of Nexa, the exclusive chain of showrooms, has contributed its bit to the fast-paced growth of Maruti, particularly in the past 18 months. Maruti has accomplished this under the astute leadership of Kenichi Ayukawa, CEO & MD of Maruti Suzuki India. That is why BW Businessworld ranked Ayukawa at the fifth position in the heavyweight category of its special issue on ‘India’s Most Valuable CEOs’ (See: BW Businessworld issue dated 8 March 2017).

In the current issue on the Fastest Growing Companies, it is apt that Maruti Suzuki has been ranked second in the category of companies above Rs 50,000 crore in revenue. Because it is for the first time that Maruti Suzuki has crossed the mark in 2015-16. For the financial year ended 31 March 2016, exactly three years after Ayukawa’s appointment as the CEO, Maruti Suzuki had a 47 per cent share in the passenger car market with record 33 per cent increase in sales to Rs 56,350 crore and 91 per cent jump in net profit to Rs 4,571 crore compared to FY13 numbers. For 2014-15, the company’s net sales were Rs 49,970.64 crore. According to R.C. Bhargava, the 83-year-old chairman of the company, the success of Ayukawa lies in his ability to absorb and learn quickly the way Indians think and decide.

Let us examine some of the reasons behind the success of Maruti Suzuki in the past one year or so. In the past 12-15 months, Maruti Suzuki has successfully braced its position in the premium segment. Three of its models — Baleno, Vitara Brezza and Ciaz — are now the bestselling cars in their respective segments. As per industry sales data, the Maruti Ciaz, Baleno and the Vitara Brezza have successfully outsold cars such as the Honda City, Hyundai Elite i20 and the Hyundai Creta for the period of April 2016 to 31 January 2017. In this 10-months period, Maruti Suzuki sold 53,644 units of the Ciaz in the mid-segment compared to 45,395 units of Honda City and 13,246 units of Hyundai Verna.

In the fast growing compact SUV segment, Maruti sold 88,537 units of Vitara Brezza while Hyundai sold 77,896 units of Creta and Mahindra sold 54,205 units of Bolero. In the premium hatchback segment, Maruti Suzuki was able to sell 96,720 units of Baleno compared to Hyundai selling 86,722 units of Elite i20 while Honda was able to sell only 26,269 units of its highly sold Honda Jazz.

In February 2016, Maruti had five models in the top-10 list in the domestic passenger vehicle market. Exactly a year later, Maruti retained its leadership position with six of its models listed in the top-10 selling brands — Alto (ranked 1), Dzire (2), WagonR (3), Swift (5), Vitara Brezza (7), and Celario (9). Maruti’s overall marketshare is expected to touch 50 per cent in FY17. As per the latest data from the Society of Indian Automobile Manufacturers (SIAM), in February, 19,524 units of Alto were sold followed by Dzire (14,039 units), WagonR (13,555), Swift (12,328), Vitara Brezza (10,046) and Celario (8,315).

As Maruti says on its website, from producing 40,000 units of cars in the early 1980s to 15 lakh cars annually, Maruti Suzuki has always been on a growth trajectory. Of course, it is backed by a team of over 13,200 dedicated professionals that turn out 15 car models with over 150 variants day in and day out. And this drive is only backed by a nationwide service network across 1,600 cities and towns. Way to go!