Maruti Suzuki Revives Putting Slowdown Behind It

Published Date : Aug 18, 2014

Maruti Suzuki stocks are showing great promise of reviving the domestic auto industry after burying the slowdown in the past. With the ongoing progress, the company is likely to record double digit growth in terms on volumes in the coming two to three years.  

Maruti has not only regained its market share, but has indeed come up with an improvised line of products too. It has also devised better localization plans to achieve good realizations and increase profit margins.

Maruti Suzuki recorded a 12.5% growth in the period April-July 2014. Besides this achievement it has also taken on some serious competition to win back its market share. The company had dipped below 40% in 2011-12 and 2012-13. However, by last fiscal year end its market share for passenger vehicles was up to 42% and it reached 44% in the period April-July 2014.

The factors contributing to Maruti’s sustained strong volume growth is, it being the biggest player in the small car segment, considering three fourth of India owns small cars. Its latest launch, Celerio has also been well-received by the audience.  The company’s forthcoming launches Ciaz Sedan and a compact UV also show great realization potential.

Maruti Suzuki might have to give away attractive discounts to its customers to revive faster in this period. It can then narrow down the discounts with improvement in demand. 

With a promise in rise of localization, the company will be further protected against currency fluctuations. The import has already been cut down to 16% of sales at the moment, as compared to 20-25% about two to three years ago.