Maruti Suzuki, India’s leading automobile manufacturer, is setting its sights on the sports utility vehicle (SUV) market to drive renewed optimism in its stock. With the introduction of new models like Jimny, Fronx, and Invicto, Maruti is poised to challenge and potentially outperform major SUV players such as Tata Motors, Mahindra and Mahindra, and Hyundai.
Although Maruti lost a marginal market share in the SUV segment due to strong competition and global recessionary fears, the company is now ready to compete head-on and regain its position in the domestic market. The improved overall demand environment and strong order book have boosted confidence in Maruti’s prospects.
Analysts believe that Maruti’s foray into the SUV space is paying off, with the initial response to its new models being encouraging. This success has alleviated concerns that the company would lag behind its competitors. Maruti has consistently launched new models in recent years, which has helped the company gain market share. The widespread demand for Maruti’s SUVs has created an opportunity for the automaker to expand its horizons and increase its market share.
Currently, Maruti holds a 17 percent market share in the SUV segment, while Tata Motors leads with 31 percent. However, BNP Paribas estimates suggest that Maruti will become the overall volume market share leader in the SUV space by the end of this fiscal year. Some analysts even believe that Maruti has the potential to become known more as a full-blown SUV player than as a leader in the compact car segment, which has been its historical forte.
The introduction of Fronx, Jimny, and the adaptation of Toyota’s Hycross called Invicto has generated significant interest among buyers, as evidenced by their outstanding order book of 55,000 units. Analysts predict that Maruti’s newer models could contribute an additional 25,000-30,000 incremental sales per month. This positive sentiment is reflected in the recommendations given by analysts, with the majority suggesting a buy rating for Maruti’s stock.
While Maruti has seen a lag in volumes in its SUV sales, analysts remain hopeful that the company’s positive momentum will help it outperform its competitors in the coming years. Sales of Maruti’s utility vehicles, such as Brezza, Grand Vitara, and Ertiga, witnessed a significant increase in June compared to the same month of the previous year. Additionally, the automaker reported an 8 percent growth in domestic passenger vehicle sales.
As Maruti continues to focus on the SUV market, it remains to be seen how the battle with other automobile giants will unfold. However, with a strong lineup of new models, a favorable demand environment, and positive market sentiment, Maruti is well-positioned to dominate the SUV segment in the coming years. Investors and industry observers are optimistic about the company’s prospects, which is reflected in the bullish recommendations for Maruti’s stock.
In conclusion, Maruti’s entry into the SUV market has sparked renewed optimism in the company’s stock. With the introduction of new models and a favorable demand environment, Maruti is poised to challenge and potentially outperform its competitors in the SUV segment. As the company’s order book grows and sales of its new models gain momentum, Maruti is set to capture a larger market share and consolidate its position as a major player in the Indian automotive industry.
