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Competition Shrinks Maruti Suzuki's Market Share
Maruti Suzuki could easily say every second car sold in India was its own until two years ago. Maruti Suzuki had maintained a market share of above 50 per cent since several years. But the figure came down to just above 50 per cent in 2009. The downward trend accelerated in the past two years with the market share just above 40.3 per cent.
Much of this decline has been due to emerging competition but Maruti Suzuki must also take a bit of blame. The Indian carmaker has been slow to respond to the changing requirements of the Indian car buyer. It was not able to deliver more diesel cars when demand for these cars started to increase. Carmakers such as Volkswagen quickly latched on to this opportunity have launched affordable diesel cars.
Volkswagen which has a 0.2 per cent market share in India in 2009 now commands a market share of 4.3 per cent. Ford has doubled its market share from 2.2 per cent to 4.8 per cent. While Volkswagen has been boosted by the Polo and Vento, Ford has benefited mostly by the Figo. Hyundai, the second highest selling carmaker in India has not been able to make a big impact.
Maruti Suzuki has not been able to shake of its image of being a small car maker. While the Alto has been India's best selling car, its larger car the SX4 has not become a car that we see in every Indian town or city. When the petrol prices started going up and car buyers were looking at diesel options, Maruti did not have enough options. This is where Ford and Volkswagen gained advantage.
Maruti Suzuki then suffered the jolt of three consecutive strikes at its plant in Manesar. This not only increased waiting periods but also dented its credibility. The carmaker is now struggling to wrest back lost market share but is only looking at a 2 to 3 per cent hike.
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