Smart Moves Keep Maruti in Lead
Maruti Suzuki has launched the new small car Ritz. This is the second small car in less than six months to be brought out by the brand. The slew of launches signifies that Maruti Suzuki is confident of higher profit margins, since the economic slowdown set in. The company is upbeat and is looking forward to post high growth rates that will reverse its gloomy days.
As India’s largest car manufacturer, Maruti Suzuki has had to suffer losses as its market share was grabbed rivals Hyundai Motors and Tata Motors. Hyundai had the Santro and i10 in small car category and the i20 and Getz Prime in the premium small car segment. Tata Indica grabbed consumer who have normally preferred M800 and other cars.
Hence the launch of new Ritz is significant for Maruti Suzuki. The company hopes that Ritz will replicate the success story of Swift hatchback which has sold more than 30 lakh units so far. The Ritz is expected to strengthen Maruti Suzuki’s position in the Indian car market.
It comes with an introductory price of Rs 3.90 lakh to Rs 5 lakh which is highly attractive for small car buyers. The pricing positions it directly against Hyundai i10 with the same prices. But for Maruti buyers, Ritz is taller, is more spacious interiors which Indian families will love. The fine fit and finish materials in the interior will be highly appealing to large Indian families.
Maruti Suzuki sells every second car in India and holds a lion’s share of 58 percent in the market, particularly the A2 segment (compact car). The small cars line-up in Maruti includes M800, Omni, Swift, Alto, Zen, A-Star, and Wagon-R. The new hot hatchback Ritz is likely to further strengthen the Indian car market. Maruti has recorded sales of 8 lakh cars in the last fiscal year. This ahead of Hyundai Motors that sold only a quarter of that number.
The company’s foray into rural markets has got a favourable response. The sales of Swift hatch have been the strongest followed by other cars in the line-up. It is also planning to double the number of dealerships in rural areas. Maruti knows that in future sales would largely come from rural areas.
Another favourable start in the year, has been the lower input costs which would directly reflect in price tags of the car. Eventhough sales went up by 14 percent Maruti continued to show lower profits. The reason was attributed to high import costs, the appreciating Yen and forex hedging losses. The lower inputs cost will guarantee affordable cars, where Maruti Suzuki is a leader.
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