Maruti Suzuki Business Review is our exclusive report with in-depth analysis. Normally New model launches result in a spike in a company's market share in the overall Industry. New Model launch can be divided into two part, one is in the same segment and other is in the new segment. If it is in the upgraded segment (low to high), there are only a few cases where customers changed positively brand perception from low segment to Premium segment. But the probability is more in vice versa cases.
Understandably so, as the novelty factor results in a brief demand surge. The size of the quantum of market share change also depends on what segment/category the new model has been launched in. For example, the uptick in market share for Maruti when it launched the Swift and CIAZ. We have noticed that before launching and after 1 year of the time the excitement has disappeared. Maruti is entering into a new segment with new model along with new sales channel pan India. It is high-risk strategy to implement new, Product, New Segment & with new dealer set up at a time. The company has tried a couple of times to enter into premium segment but it could not penetrate. In the Global auto world, Brand perception does not change easily. There were a lot of experiment done with Maruti 800 product brand but it ends with the extended life cycle. On the other hand, Maruti ZEN which was also company’s flagship model in Mid Segment, its product life cycle ended before its natural time span due to re-launch of product.
Company cost reduction plays an important role to keep its high profit in FY Q1, the growth of 56.5% compares to last year. Other expenses like Promotion, Exchange rate, and high sales volume also support to make it more profitable.
A company’s overall market share is also impacted by new model launches by Foreign & Indian competitors. Maruti, one time with a ~100% share of the van market, saw its share fall to ~50% in 2011-12, once again company kept its strong position with increasing its market share from 53% to 75% market share. Tata Motors and M&M introduced their van type models based on LCV platforms (Gio & Maximo for M&M; Ace for Tata Motors).
In FY 15, Maruti gained around 2% market share in the car segment. In UV segment also it gained around 0.70% market share. IIFA award Maruti has introduced its S-CROSS model. Company target to sell 20 lakhs vehicle. S-CROSS look attractive but its interior need to update to match premium class products.
The Maruti Suzuki was known as a common man car. Brand Maruti Suzuki consider for Small and economy car segment. Between 2 to 7 lakhs is a price bracket for Maruti Suzuki brand. S-CROSS over is launching by brand Suzuki. It is interesting to see whether customers are considered Suzuki as a Premium brand or not. In Germany, Volkswagen is also known as an economy car and customers preference another brand like Audi, Mercedes, BMW, Jaguar, Porsche as a premium brand at the time of purchase.
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