Marutis high expectations from the current fiscal, which comes after two years of slow growth, is not without reason. With most of the current industry growth coming from the newly-launched cars Hondas City or Fords EcoSport Maruti has now lined up a major new model onslaught for FY15. Three entirely new vehicles, the Ciaz mid-size sedan, a light commercial vehicle and the S-Cross crossover/compact SUV, will be added to Marutis current portfolio of 12 vehicle brands this fiscal. Meanwhile, the popular Swift, Dzire, Alto K10 and Ertiga models, are also expected to get refreshed with a facelift to boost volumes as consumer sentiment improves under a new government. In comparison, Maruti had only launched one new brand in the previous fiscal (FY14) the Celerio in January 2014.
In Italy, we were shown pictures of the three new models and were asked to prepare for a good year. The company officials said growth in new car sales is expected in the 15% range and the exchange growth at 30%, one of the dealers FE spoke to said.
It is clear that new models are driving demand in the market today. For Maruti, the Celerio is the perfect example and there are now enough bookings for the car to guarantee a few months of production. The launch of multiple new models at such a time is definitely a good thing for Maruti and a worry for rivals, another source close to the development said.
Asked about the growth outlook presented to dealers over email, a Maruti Suzuki spokesperson said, We do not disclose such business strategic information.
In FY14, Marutis domestic sales rose just 0.25% to 10.53 lakh units while the entire PV industry fell 6% its market share in the fiscal stood at 42.08%. In FY13, Marutis volumes were up 4.44% to 10.51 lakh units market share stood at 39.1%.
According to Gaurav Vangaal, an automotive analyst for light vehicle forecasting at IHS, The business relationship between dealers and manufacturers starts with number of product offerings. It should not be a surprise to expect such growth by any carmaker, when it is providing such a strong product pipeline to dealers within span of a year.
While Mahindra & Mahindra has major launches coming only after a years delay (from FY16), Marutis other rivals, including Tata Motors, Honda and Hyundai, also have major plans for this fiscal. Tata will launch the Bolt hatchback and Zest compact sedan, while industry sources say that another small car may also be launched in the same fiscal. Meanwhile, Hyundai is expected to launch a new premium hatchback and a compact SUV, while Honda will launch its Mobilio MPV and new Jazz premium hatchback.
Marutis efforts to grow volumes could also be aided by an improving business and consumer sentiment this year, which would lead many of those who had delayed purchases till now to start buying again. I see many positives for this year. The old government had taken some steps towards reforms and there is a sign of revival starting with the heavy truck segment. I expect the next government to drive job creation, and the growth in commercial vehicles will create a better environment in terms of consumer confidence across segments, said Wilfried Aulbur, managing partner & CEO, Roland Berger Strategy Consultants India.
The Maruti Suzuki scrip closed down 1.46% at Rs 1,881.75 on Wednesday on the BSE.