Financial Daily from THE HINDU group of publications
Tuesday, Oct 22, 2002
Marketing - Market Shares
Maruti loses 8 pc of market pie in 6 months
NEW DELHI, Oct. 21
EVEN as the passenger car market is showing signs of acceleration, it seems to be deceleration time at Maruti Udyog Ltd. The overall passenger car industry grew by 4.1 per cent in the first half of this fiscal ended September 30, but Maruti has seen a drop of 12 per cent in sales volumes.
It now accounts for less than half the market - Maruti's share dipped by a full eight percentage points to 48.06 per cent from 56.6 per cent in the first half of this fiscal. According to industry officials, Maruti's market share has declined primarily due to decreasing sales of the company's bread-and-butter model, the Maruti 800. The sales of Maruti 800 declined by about 16.7 per cent to 61,355 units in April-September 2002 from 73,707 units in the same period last year.
"With cheaper loan schemes available in the market, people prefer to go in for a B-segment car as an entry level car," says an industry official.
Not surprisingly, the B-segment, comprising models such as the Hyundai Santro, Fiat Palio and Tata Indica, has seen a growth of about 14.5 per cent during the first six months of the fiscal .
Maruti has a presence in this segment with not one, but three models - the Zen, the Alto and the Wagon R. Yet, this has not translated into growth. The company's sales in the B-segment have declined by about 4.3 per cent. In the same period, competitors such as the Santro and Indica registered a growth of about 21.4 per cent and 27.4 per cent respectively.
Maruti officials, nevertheless, are expecting things to start looking up in the coming months. "Following the price cuts for the Maruti 800 in July, we have been able to sustain sales of 10,000 units and above per month for the model," says a company official.
The company feels it will be able to maintain the sales of the model at this level in the future.
Maruti had reduced prices of the Maruti 800 in July by about Rs 15,000-18,000.
The company has, of late, introduced a range of discounts and schemes - in line with the industry - across its other models too.
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