According to an ET report, the Society of Indian Automobile Manufacturers (SIAM) anticipates a moderate 3-5% increase in passenger vehicle sales in India this fiscal, considering the expected cooling off of sales following the high base of FY24, during which the industry grew by 8.45% to a record 3.9 million vehicles.
However, Maruti is relying on the launch of the new generation Swift and Dzire models, scheduled for release later this year, to drive overall volume.
Maruti Plans in Fourth Gear
The compact car segment has been facing challenges due to a shift in buyer preference from hatchbacks and sedans to sport-utility vehicles (SUVs). In FY24, domestic compact car sales experienced a decline of about 4%.
Maruti has instructed its part vendors to prepare for supplying a total of 2.4 million units this fiscal, which includes domestic sales, exports, light commercial vehicles, and sales to Toyota Kirloskar Motor. This target represents a 10% increase compared to FY24.
Maruti Suzuki has confirmed its plans to prepare for a production volume of 2.4 million components. Rahul Bharti, head of corporate affairs told the financial daily, “The total production of components is the sum of domestic PV sales, exports, OEM (original equipment manufacturers) sales, LCV sales, and parts made for Grand Vitara. Considering fluctuations and the need for margins etc a request for preparedness for components for 24 lakh (2.4 million) volume has been conveyed to vendor partners.”
In order to achieve its goal of doubling output by 2030, Maruti intends to significantly increase exports and invest Rs 1.25 lakh crore in ongoing capacity expansion. This plan also involves substantial capital expenditure in research and development, which was communicated to vendors during a recent meeting.
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The company aims to increase its exports from 283,000 vehicles in FY24 to approximately 300,000 vehicles in FY25, as disclosed during a quarterly investors’ call.
If Maruti successfully maintains its production and sales guidance provided to vendors for FY25, it will mark the third consecutive year of record-breaking annual volumes for the company.
Various analysts have projected impressive volume estimates for Maruti in FY25, with CLSA estimating 2.27 million units, Jefferies forecasting 2.28 million units, Kotak Institutional Equities expecting 2.21 million units, and Morgan Stanley anticipating 2.3 million units.
Maruti’s efforts to outpace industry growth indicate the company’s aggressive approach to regaining market share in the highly competitive automotive market. The company has successfully halted its market share decline and recovered some of the ground it had lost to competitors over the past three years. In FY24, Maruti’s market share increased by 100 basis points to 42%, largely attributed to higher SUV sales.
