“Compact sedan is a very reliable and stable segment. We can count on stable numbers all the time,” Maruti Suzuki MD & CEO Hisashi Takeuchi.
11 Nov 2024 | 4682 Views | By Kiran Murali & Yukta Mudgal
At a time when most of the passenger vehicle makers are increasingly favoring sports utility vehicles, India’s largest car maker Maruti Suzuki India Ltd believes it is crucial to have a strong product lineup across all mass-market car segments for a high market share.
“Although the SUV segment is ...
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At a time when most of the passenger vehicle makers are increasingly favoring sports utility vehicles, India’s largest car maker Maruti Suzuki India Ltd believes it is crucial to have a strong product lineup across all mass-market car segments for a high market share.
“Although the SUV segment is growing, all the other segments are equally important for us. Because, to retain our high market share, we have to have a presence in each segment. Especially in the sedan segment, which is traditionally very important,” MD & CEO Hisashi Takeuchi said while launching the new Dzire.
India’s passenger vehicle industry has been witnessing a strong shift in consumer shift towards SUVs from hatchbacks and sedans over the last couple of years. Hatchbacks, or small cars, and sedans have seen a significant decline in sales over the past decade.
This resulted in automakers putting their major focus on SUVs, with several vacating the small car space. The sedan segment has also been missing major product action over the period.
However, with the launch of the new Dzire sedan, a few months after the rolling out of the new Swift hatchback, Maruti Suzuki underscores the strategic importance of the sedan segment in its pursuit of continued market dominance.
“Compact sedan is a very reliable and stable segment. We can count on stable numbers all the time,” Takeuchi said. The automaker spent Rs 1,000 crore on the design, development, and production of the new 4th generation Dzire, which comes with the new 1.2-litre three-cylinder Z Series engine and a slew of new features, including safety.
With the new Dzire, the automaker expects to re-energize the segment. “Taking a long perspective, by 2030, we feel the passenger vehicle market will be around 60 lakh units and sedans will still have a reasonable pie of close to 10%,” Senior Executive Officer for Marketing and Sales Partho Banerjee said.
Sedans currently account for around 8% of the total passenger vehicle volume. And compact sub-4 meter models contribute to around 70% of the segment. Maruti Suzuki is the market leader in the compact sedan space with a market share of around 60%. It sold around 1.6 lakh units of Dzire last year.
Tata Tigor, Honda Amaze, and Hyundai Aura are other top-selling models in the compact sedan space. Dzire generates a significant part of its sales from the taxi segment where the car is exclusively sold as the low-frills 'Tour S' variant for fleet operators. Around 65-70% of the Dzire sales came from the personal segment, while the rest account for the fleet segment.
“In the previous generation Dzire, there was a challenge to meet the requirements of personal and fleet customer segments. So we used to keep a balance to serve both segments,” Banerjee said.
In a bid to prioritize the requirement for the personal segment, the fourth-generation Dzire will be available only for personal mobility. For, fleet users, the automaker will continue to offer the previous generation Dzire.
Apart from Dzire and Tour S, the mid-size sedan Ciaz is the only other sedan that Maruti Suzuki has in its portfolio.
When asked if the company has plans to launch new sedans in the market, Takeuchi noted that he does not see a need to introduce a completely new model in the sedan market. “We have to do refreshes to the existing products, but not additional products right now,” he said.
The new Dzire is the first vehicle in the company’s portfolio to secure a 5-star rating in the global NCAP vehicle safety testing.
“Safety is important. That is why we are trying to make vehicles more safer for our customers. Adding features is not just enough, that is why we are trying to make our vehicles safer,” Takeuchi added.
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