Maruti Suzuki bets on SUVs and CNG to drive growth | The Financial Express

Maruti Suzuki bets on SUVs and CNG to drive growth

The Maruti Suzuki management remains optimistic about matching industry growth rate next year backed by strong CNG focus and sees demand for used cars increasing.

Maruti Suzuki bets on SUVs and CNG to drive growth
Maruti is betting on CNG; out of the 16 new models planned, 10 have got CNG,

The Maruti Suzuki India stock ended Friday trade on a strong note bouyed by encouraging Q2 performance on the back of strong festive sales. Going forward, the company sees CNG and SUVs to be the primary growth drivers even as the auto market leader braces up for degrowth in hatchbacks.

While the diesel volumes have been coming down and Maruti Suzuki sees limited room for growth in the hatchback segment, “20 percent of its sales have come in from CNG, so far in FY2023,” pointed out Shashank Srivastava · Executive Director, Maruti Suzuki India.

But CNG is not exactly cheap anymore. Prices have been increasing steadily and the gap between diesel and CNG has been narrowing. However, Srivastava does not see it as a potential concern yet and revealed that, “out of the 16 new models planned, 10 have got CNG.”

Outlining the growth drivers in Q2, Maruti Suzuki Chairman, R C Bhargava said that the, “SUV segment has seen a major chunk of growth.” He elaborated on the changing sales dynamics and said there is a “change in the sales composition in India. We are seeing a higher percentage of sales in the upper end of the market compared to the lower end.”

The small car market is another pocket of concern as a result and the company is seeing declining trends over the last three years with the assumption that inflationary pressure could further impact demand here. However, one of the segments that have been a direct beneficiary of this has been the used car space. Maruti Suzuki’s True Value, one of the earliest organised plays in this segment,sees demand continuing to remain strong. Srivastava expects the used cars to “account for 20-23 percent of growth from 18-19 percent last year.”

Overall Maruti is confident of FY2023 growth to inch closer to pre-Covid levels. According to Bhargava, the “growth rate for the overall auto industry is seen around 8 percent for next year and I expect Maruti to grow around the same levels.”

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 28-10-2022 at 20:34 IST