Maruti Suzuki gains from the diesel to petrol shift, here’s how

Despite exiting the diesel engine space earlier this year, Maruti Suzuki has recorded highest ever sales in October 2020, with 51% market share.

By:November 21, 2020 10:56 AM


Despite exiting the diesel engine space earlier this year, Maruti Suzuki has been able to clock 51.1% market share in the Indian passenger vehicle (PV) segment—in October 2020 (retail sales)*. The company attributes this to a strong petrol and CNG PV portfolio. In the April-October 2020 period, Maruti Suzuki’s retail sales share stood at 50.4%.
In October 2020, helped by the pent-up demand and festive season sales—as well as a section of commuters shifting from public transport to private vehicles—Maruti Suzuki sold 1,66,825 vehicles in India, including 1,63,656 PVs and 3,169 light commercial vehicles (the Super Carry)—the highest-ever wholesale figures for the company. (The previous highest sales for a month happened in April 2018, when the company sold 1,64,978 units.)

In addition, in October 2020, four Maruti Suzuki models sold their highest-ever numbers (wholesale figures). These include the Swift (24,589), the Baleno (21,971), the WagonR (18,703), and the Eeco (13,309). Also, the retail sales for the Eeco (16,053) and the Ertiga (12,451) were at a peak in the same month. Shashank Srivastava, executive director, Marketing & Sales, Maruti Suzuki India, says that exiting the diesel engine space hasn’t hugely impacted sales of company cars. “There is a shift happening from diesel to both petrol and CNG. Last year, the sales share of diesel PVs was about 30%, but in October 2020 it has gotten reduced to just 17%. Reasons include the price of diesel and petrol fuel now almost equal at many places, and after BS6 the sticker price of diesel cars has increased, with the price difference between petrol and diesel cars at almost Rs 1.5 lakh.”

In fact, he shares that in hatchback cars in particular, the sales share of diesel engine models has gotten reduced to a minuscule 0.3%. “In the April-October 2020 period, less than 0.3% diesel cars were sold in the overall hatchback segment. In hatchbacks and sedans together, the diesel engine sales share is less than 2%, and in the MPV segment it is 22%. It’s only in the SUV space where diesel engine cars still enjoy a substantial share, but even within that in entry-level SUVs the share is just 30%,” Srivastava says. Maruti Suzuki also hasn’t lost out majorly on sales in the fleet segment (primarily diesel and CNG). A reason is that due to the Covid-19 lockdown overall fleet sales have been muted. “Whenever the demand revives in the fleet segment, we have our CNG options ready; we currently offer eight car models in CNG,” Srivastava adds.

According to some analysts, the current car sales spurt is expected to continue till December, after which it may adjust to the ‘real’ market demand. Srivastava says that Maruti Suzuki is likely to clock high sales in December, because the bookings with the company are substantial, but beyond that “it’s a question mark,” he adds. “We’re not sure which way the situation will move going forward, especially with Covid-19. Also, car sales are directly connected to GDP per capita, and we aren’t sure about the overall economic fundamentals, going forward. These two uncertain factors make the forward-guidance difficult, January onwards.”

*(Calculated by the author from data provided by industry sources)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Latest Auto News