Maruti ends Mahindra domination in UVs

The domestic utility vehicle (UV) segment, an age-old turf of Mahindra and Mahindra (M&M), is seeing the rise of a new leader. Maruti Suzuki, perceived a small-car maker for long, has managed to claim leadership position in this fastgrowing segment on the strength of Vitara Brezza, which emerged as the most-sold domestic UV last year replacing M&M’s Bolero. Brezza remains on a waiting list even after more than a year of its launch.

Maruti’s cumulative sales of UVs to its dealers since November last year have been a few hundred units more than those of M&M, data from the Society of Indian Automobile Manufacturers show. The Suzuki-controlled car maker sold 129,020 UVs in domestic market, almost 500 vehicles more than the 128,534 units sold by M&M. In four of the last seven months, Maruti sold more UVs in domestic market than M&M.

UV is the fastest-growing segment of the domestic passenger vehicle industry (which also includes cars and vans). It grew at 30 per cent in FY17 against the sub-four and two per cent growth in cars and vans, respectively. One of every four passenger vehicles sold (three million units) in domestic market is a UV. While the market grew at 30 per cent, M&M’s sale was flat last year. This brought the company’s share to 29 per cent in FY17 from 38 per cent in the previous year. None of the top-three most-sold UVs (Brezza, Hyundai Creta and Toyota Innova) in domestic market during FY17 was an M&M product. Maruti’s share expanded from 16 to 26 per cent. Hyundai and Ford also gained share. In the first two months of FY18, M&M’s share has come down further to 27 per cent while Maruti is a clear leader, with a 31 per cent share in the segment. Maruti is learnt to be working on expanding its UV range to further grow sales volumes. M&M points to changed market dynamics. Veejay Ram Nakra, the company’s senior vice president (sales and marketing, automotive) said the UV segment saw almost 20 new products in the last five years, resulting in expansion and fragmentation. “Last year alone, the segment saw six new launches at different price points. This is the key reason behind the loss of our market share,” he added. He also attributes the decline to external factors like demand for petrol UVs (where M&M’s presence is small) and demonetisation, which impacted the company’s key buyers like small businessmen, farmers, small enterprises and those in the real estate or construction industry.