Maruti Suzuki’s small car WagonR has recently become the third vehicle from the company’s stable to reach the 2-million unit sales mark after the Alto and the phased out 800 (Maruti’s first compact car). As the number of launches in the mini segment is drying up owing to a shift in customer demand and the company’s focus towards premium products, it is quite an achievement to reach the 2 million sales mark. In fact, after staying subdued for a couple of years due to poor demand in the rural and semi-urban markets, combined volumes of Alto and WagonR have recovered and increased 28.6% y-o-y to 2,92,442 units in the first five months (April to August) of the current financial year. During the same period, volumes of WagonR grew 3.4% y-o-y, while for Alto, it increased 16.7%. In FY17, the volumes of WagonR increased just 1.6% to 1.72 lakh units, while in FY16, the volumes spiked by just 0.43% to 1,61,250 units.
According to RS Kalsi, senior executive director — sales & marketing, Maruti Suzuki, first-time buyers of WagonR stood at 35% in 2005, while it rose to 46-47% in 2016-17, which is testament to the strong brand that WagonR has become since it was launched in 1999. “To keep its position strong, Maruti Suzuki has upgraded the brand periodically with the introduction of features, such as dual airbags, ABS, multiple fuel options, premium interiors and Auto Gear Shift (AGS) technology. For a decade or more, Wagon R has been featuring in the top half of the list that comprises the most sold vehicles in the domestic market,” added Kalsi. Apart from retail customers, WagonR has become a popular product in the commercial channels. According to Maruti Suzuki, sales to cab aggregators comprise only 5% of the total sales of the vehicle.
Maruti also has plans to go in for a full model change for WagonR but it may not happen in the current fiscal. According to Kalsi, the company will go for a complete model change but it depends on the engineering team when the new vehicle will be launched in the market. According to sector analysts, FY18 may see a comeback of the small cars because of the recovery of the demand in rural markets and owing to the delayed impact of increase in salaries of the government employees. “Maruti has 30% exposure in rural markets and demand recovery there would positively impact the volumes, especially of Alto and WagonR. As result, we can see the increased wholesale dispatches of Alto and WagonR in FY18. Also, WagonR attracts a lot of customers in the commercial channels, or from the cab service providers. Last year, a lot of government employees deferred their purchase because of demonetisation and these people are also expected to be back in the market after the GST implementation,” said an analyst from a foreign brokerage firm.