Maruti banks on new Swift to lift sales

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: Jul 28 2011, 07:40am hrs
Struck by the worst labour crisis in over 10 years and cornered by rising competition, the country's largest carmaker, Maruti Suzuki, is banking on its refurbished hatchback Swift to lift sales and light up the festive season. Set for an August 17 launch, it hopes that the new car would help increase Maruti's market share by at least five percentage points.

As per Maruti's estimates, the companys market share in the premium A2 segment has been battered over the years declining 25 percentage points in the last two and a half years from 75% to less than 50%. We expect our market share in the space to go up to around 53% over the next few months after the new Swift launch, chief general manager (marketing) of Maruti Suzuki Shashank Srivastava says.

According to Maruti, the A2 plus segment is key since its share in the small car space has risen from just 8% in 2007-08 to 19% as of the first half of the current fiscal. Moreover, this space grew at 63% last fiscal compared with 30% growth in the overall passenger car sales. In 2010-11 Marutis market share in the space stood at 48% to 2.1 lakh units.

During the last three financial years, sales of the Swift has jumped nearly 60% to 1.4 lakh units. This is a very crucial space for us. We are seeing a bulk of customers moving up the ladder and wanting to own cars in this segment, Srivastava added. At present, the segment is dominated by Maruti's Swift & Ritz, Ford's Figo, Hyundai's i20, Honda's Jazz, Nissan's Micra and Toyota's Liva. The data of this segment from the Society of Indian Automobile Manufacturers (SIAM) for the April-June quarter 2011-12, which is more broad-based than Maruti's, (since it includes more car models into account for the A2 plus segment) is even more telling. In this period Maruti Suzuki's market share in the segment has dipped four percentage points to 29.3% at 55,651 units.

In fact, in the A2 plus space Maruti's total sales in the quarter fell below Hyundai's Getz, i10 and i20 for the first time. While the South Korean carmaker, during this quarter, sold 57,512 units with a growth of 5%, Maruti's sales dropped 13% to 55,651 units. The sharp sales drop was also on account of a 10-day long strike at Maruti's Manesar unit which cost the company a total production loss of over 12,000 units.

Our market share has come under a lot of pressure especially when we created this segment with the launch of Swift in 2005, Srivastava says. The new Swift has started on a positive note. In the last one week total bookings have reached 30,000 second only to Maruti's Zen bookings that had reached 50,000 in the first week in 1994.