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  1. No Maruti Suzuki Alto, first time buyers now buying upscale Dzire, Baleno, Vitara Brezza

No Maruti Suzuki Alto, first time buyers now buying upscale Dzire, Baleno, Vitara Brezza

In FY17 Maruti Suzuki saw sales of its entry-level cars Alto and WagonR decline in nine of the the 12 months.

By: | New Delhi | Updated: October 30, 2017 8:12 AM
In FY17 Maruti Suzuki saw sales of its entry-level cars Alto and WagonR decline in nine of the the 12 months. (Image: Reuters)

In FY17 Maruti Suzuki saw sales of its entry-level cars Alto and WagonR decline in nine of the the 12 months. However, the company’s overall sales grew every month on the back of its newly launched premium hatchback Baleno and later a compact SUV Brezza. The latter two models had huge wait lists running over 16 weeks and came without any discounts or freebies while the likes of Alto and WagonR do not have a wait list and come with attractive discounts; but still when it came to sales Baleno and Brezza scored over the entry level vehicles. While consumer preferences have changed one of the major reason for demand of Alto and WagonR remaining stagnant but increasing for the likes of Baleno is also because a substantial chunk of first time car buyers are increasingly going for a premium offering of above Rs 6 lakh unlike the trend few years back when the movement up the chain happened step by step.

According to Maruti Suzuki over 50% of first-time carbuyers have opted for the new Dzire, which is a compact sedan, as their first car purchase. This is significantly higher than 30% from two years back. As for Baleno almost 30-35% of volumes comes from the first time buyers, industry sources said. The trend continues with Hyundai as well with a substantial chunk of first time buyers choosing offerings like Elite i20 and Creta compared to entry level vehicles like EON and Grand i10. As per data collected from the Hyundai dealers, almost 15-20% of the customers of Elite i20 are first time car buyers.

According to Puneet Gupta, associate director, automotive forecasting, IHS Automotive, “first time buyers prefer Maruti Suzuki as it’s the most reliable brand in India. Hence we can see first time buyers forming a major chunk of Dzire and Baleno customers. Also young and aspirational first time customers do not want to go for A segment cars like Alto which are old and have no style element in them. Introduction of Renault Kwid was a turning point but now again volumes have been subdued even for kwid”.

“Interest rates on car loans have come down significantly in the last two years and the income level of first time buyers have also increased. Hence some of them are going for offerings in the sedan segment,” said R S Kalsi, senior executive director, Maruit Suzuki. According to industry sources, for Maruti first- time car buyers in the second quarter of the current fiscal have increased to 47% compared to 40% in the corresponding period. While in the first half of current fiscal the proportion of first time buyers have increased to 49% compared to 41%.

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