E-Paper
Maruti plans to focus on mini hatchback segment as SUV competition heats up
Mini hatchbacks are considered Maruti's bread and butter. It has managed significant market share in the segment.Maruti will look at non-metros and semi-urban centres to drive growth in vehicle sales
NEW DELHI: Maruti Suzuki India Ltd, the country's largest carmaker, plans to refresh its product portfolio in the small or mini hatchback segment to protect its 50% domestic market share.
To do this, the company will also look at non-metro and semi-urban towns to drive growth in vehicle sales as demand in metros have remained stagnant over the last two financial years.
Small cars though offer lower profit margins than larger sedans and sport utility vehicles. Customer preferences in urban pockets have also been shifting towards bigger cars.
As a result, most of Maruti’s competitors have either decided to move out of the segment or maintained a token presence.
Mini hatchbacks or small cars, though, are considered Maruti's bread and butter and the company has managed to command significant market share in the segment over the years with multiple products such as Alto, Zen and 800.
Last year, the company launched another S-Presso, in the segment, after a decade and has maintained wholesales of 10,000-11,000 units, despite the slump in vehicle sales due to economic downturn in the country.
The Economic Times on Tuesday reported that Maruti is developing two new small cars with 800cc and 1000cc engines.
According to a person directly aware of the development, these two products may replace the Alto and Celerio models of the company and is likely to be launched during the second half of next fiscal.
The renewed focus on the segment at a time when most manufacturers are betting big on sport utility vehicle segment also points to the change in Maruti’s strategy.
After launching the Nexa chain of dealerships in 2015, Maruti focused on launching premium vehicles or those priced above ₹6 lakh to expand its footprint and in the process also managed to boost its operating margin.
With competition from new and existing vehicle makers intensifying, Maruti's latest move is aimed at holding on to its market share.
