PV market leader continues to feel the heat of slow sales of the Alto and S-Presso, which prove a drag on overall numbers; month-on-month growth is just 3.43% (March 2023: 132,763).
01 May 2023 | 4226 Views | By Ajit Dalvi & Mayank Dhingra
India’s passenger vehicle market leader has announced wholesales of 137,320 units in April 2023. While this constitutes 13% year-on-year growth (April 2022: 121,995), the month-on-month increase is 3.43% (March 2023: 132,763).
That the company is still feeling the heat of slow sales in the mass-market entry-level hatchback segment is ...
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India’s passenger vehicle market leader has announced wholesales of 137,320 units in April 2023. While this constitutes 13% year-on-year growth (April 2022: 121,995), the month-on-month increase is 3.43% (March 2023: 132,763).
That the company is still feeling the heat of slow sales in the mass-market entry-level hatchback segment is reflected in the sales of its two budget cars – combined sales of the Alto and S-Presso at 14,110 units are down 18% (April 2022: 17,137 units). The other model in negative territory is the Eeco van with 10,504 units, down 6% YoY (April 2022: 11,154 units).
The seven-model pack of the Baleno, Celerio, Dzire, Ignis, Swift, Tour S, Wagon R together account for 74,935 units, an increase of 27% YoY (April 2022: 59,184 units). Expect the Baleno, India’s best-selling premium hatchback in FY2023 and the utilitarian Wagon R, the best-selling passenger vehicle last fiscal, to have sizeable contributions in this category.
The premium Ciaz sedan sold 1,017 units last month, up 76% YoY albeit that is on a low base of 579 units in April 2022.
Maruti Suzuki India’s SUVs – the Brezza, XL6, Grand Vitara and the Ertiga – clocked 36,754 units, up 8% YoY (April 2022: 33,941 units).
Maruti Suzuki remains the unrivalled market leader but with an estimated order backlog of around 380,000 PVs and a hugely competitive marketplace, the company will have to put its shoulder to the production wheel.
On April 25, the company announced the upgrade of its entire range of vehicles to meet the updated Bharat Stage 6 Phase II emissions regulations. As a result, all Maruti Suzuki hatchbacks, sedans, MPVs, SUVs and commercial vehicles are now compliant with the new BS6 Phase-II Real Driving Emissions (RDE) regulations, while being compatible with E20 fuel as well.
373,000 pending orders, growing demand for CNG variants
Maruti Suzuki India, which lost some volumes in the last fiscal particularly for its Brezza, Grand Vitara and Ertiga models, is currently sitting on 373,000 pending orders, attributed to the semiconductor shortage.
According to Shashank Srivastava, Senior Executive Officer, Marketing and Sales, MSIL, “Our total production loss in FY2023 was around 173,000 units, which forms around 4.3% in terms of market share. While we continue to maintain that chip shortage will remain a hindrance in the first quarter of the ongoing financial year, we do see some recovery Q2 onwards, despite the visibility of chips being a key concern.”
In a virtual call after announcing its April sales numbers, Srivastava added that the drop in the sales of its mini cars – Alto and S-Presso – in April 2023, has been due to the discontinuation of the Alto 800 after the advent of second phase of the BS VI emission norms that kicked in from April 1, 2023.
Despite having no diesel engine on offer across its entire product portfolio, the company is witnessing a growth in its CNG-powered cars, which now contribute 24.6% of its overall sales. “Diesel contribution in the industry has dropped to 17%, while CNG has increased to 12.3 percent. The reduction in CNG prices across the country last month has helped drive CNG sales, as the differential between CNG and petrol has gone up. In Delhi, it now stands at Rs 23, as against Rs 17 earlier,” Srivastava said.
Sedans down, SUVs giving a new charge
Despite new product launches in the market, particularly with the latest Hyundai Verna getting introduced in February 2023, Srivastava says there has been a slight decrease in sedan sales last month. While sedans contributed to 10.5% of the overall market in April 2022, they have slightly dropped to 9.65% last month.
On the other hand, MSIL, which has recently introduced its latest crossover – Fronx – claims it has 26,500 bookings for this sub-four-metre SUV which will rival the likes of the Kia Sonet. The company says SUVs are driving the passenger vehicle market, with the share of SUVs growing to 47.4% in April, as against 44% in FY2023. As per Srivastava, of the total 331,747 units of passenger vehicle sales in April 2023, SUVs comprised 151,000 units.
“So, there is a consistent increase in both entry-level, as well as mid-SUV segments. Although the Maruti Suzuki Grand Vitara supplies were constrained last year, they could have improved the SUV penetration in the market even further,” Srivastava said.
With the chip constraint still persistent, Srivastava highlighted some red flags to growth including continued inflation, and the El-Nino effect which could impact rural demand. "At the moment, it is like mixed signals," he concluded.