The Two Big Battles Of India’s Auto Market

India’s largest passenger vehicle maker Maruti Suzuki India Ltd. extended its lead over rivals, riding on the sales of Vitara Brezza as it trumped Mahindra and Mahindra Ltd. in the utility vehicle segment for the second time in four quarters.

India’s largest carmaker’s market share rose more than 3 percentage points to 50.48 percent in the quarter ended June over the year-ago period, according to data from the Society of Indian Automobile Manufacturers. Hyundai Motor India Ltd., a distant second, could grow its share by less than half a percentage point to 17.08 percent.

Third-placed Mahindra & Mahindra Ltd., along with Renault India Pvt. Ltd., Toyota Kirloskar Motor Pvt. Ltd., Ford India Pvt. Ltd., and General Motors India Pvt. Ltd., saw its share fall in the first quarter.

Maruti Suzuki, best known for its small cars, continues to gain ground in the utility vehicle segment. It sold more than a fourth of all sports and multi utility vehicles in India in the year ended March, largely driven by the success of compact SUV Vitara Brezza. That brought it close to Mahindra & Mahindra, India’s largest utility vehicle maker. Demand for such vehicles has been growing and one in every four cars sold in India is now a UV compared to one in 10 a decade ago, according to data from SIAM.

“The differentiating factor for a manufacturer to succeed is the brand’s identity, its offerings, and the resale value it generates,” said Kumar Kandaswamy, senior director at Deloitte and an automobile sector expert. Maruti Suzuki’s products typically generate high resale value due to the cost-effective after-sales service.

Going beyond small cars, Maruti Suzuki has also made an attempt to enter the premium segment through its Nexa showrooms.

Maruti, The Utility Vehicle Maker

Powered by India’s largest selling utility vehicle Vitara Brezza, Maruti Suzuki sold 57,125 such vehicles compared to 53,082 units by Mahindra & Mahindra.

Maruti Suzuki first beat M&M in July-September last year, when it sold 52,611 utility vehicles against 52,287 by the Anand Mahindra-promoted company.

One of the reason experts cited for M&M lagging in SUVs is its models like the Scorpio and the TUV are dated. “In India, your portfolio lasts only two-three years. Reinventing the portfolio and distribution network are very crucial for any manufacturer to succeed,” Abdul Majeed, partner (assurance) who tracks the auto sector at PricewaterhouseCoopers India, told BloombergQuint.

Also Read: June Auto Sales Suffer Due To Looming New Tax

Honda Inches Closer To Hero

Honda Motorcycle and Scooters India Pvt. Ltd. is catching up with the market leader in two-wheelers, driven by the sales of its scooters.

Honda Motorcycle’s sales overall rose 19.4 percent year-on-year in three months ended June, more than twice the pace of the industry. Its erstwhile partner Hero MotoCorp Ltd.’s sales grew 6.1 percent.

Honda Motorcycle’s market share rose more than 3 percentage points to 30.19 percent over the year-ago period, inching close to Hero MotoCorp’s 36.99 percent. The Indian arm of Japanese major sold 14.78 lakh units in April-June compared to compared to 18.11 lakh by its former partner.

Honda Motorcycle’s numbers have been growing due to rising demand for scooters, which account for over two-thirds of its total sales. It’s the market leader in scooters with a 59.09 percent share, nearly five times Hero MotoCorp’s share.

Overall scooter sales of the industry rose 10.6 percent in the first quarter, nearly five times the motorcycle despatches.