Maruti Suzuki increases focus to bigger cars like Ertiga to bui

• Posted by Sindhuri G August 30, 2012 - Filed in Business - 2,055 views

  Buoyed by the success of its first multi-utility vehicle Ertiga, the country's largest car maker by sales Maruti Suzuki is increasing its focus on bigger utility vehicles and sedans to maintain its lead in the highly competitive Indian automobile market.
  
  The car maker plans to give its mid-size sedan SX4 a facelift (codenamed YL1) in 2013 and on the radar are two to three utility vehicles, Grand Vitara, SX4 crossover utility vehicle and compact SUV based on XA Alpha concept over the next two to three years.
  
  Maruti Suzuki is considering local production or assembly of its compact premium SUV Grand Vitara by 2014, a person close to the development told ET.
  
  Also lined up is the rollout by 2015 of a compact SUV based on the XA Alpha concept, which was showcased at the New Delhi Auto Expo this year, the person said, adding that the company's R&D wing in India would lead its development.
  
  "There is greater confidence in the Indian unit's development capabilities. The R&D centre, led by IV Rao, has managed to come out with variants without much support from Japan," said another person, who did not wish to be named. "XA Alpha will be the first product out of the full-fledged R&D centre at Manesar," this person added.
  
  If the proposal to assemble the Grand Vitara in India gets a go ahead, it will pit the vehicle against M&M's XUV 5OO and Skoda's Yeti. The XA Alpha compact will compete with Ford's Ecosport and Renault's Duster.
  
  These new products may hit the M&M the most, the Ertiga is already pitted against Xylo, going ahead Grand Vitara will be against XUV 5OO and the compact SUV will be competing against Scorpio.
  
  One of the two persons quoted earlier said Maruti is also mulling production of a crossover utility vehicle based on the SX4 platform, which will be a new segment for India.
  
  Maruti, majority owned by Japan's Suzuki Motor, has seen its market share drop nearly 5 per cent in the last 12 months to about 38%, mainly because of rising competition and a series of labour strikes at its Manesar plant, which led to substantial loss of production and revenue.
  
  A lockout at the same plant last month cost Maruti a production loss of over 30,000 cars, or over Rs 1,500 crore in revenue.
  
  Utility vehicles account for 15-17 per cent of India's overall passenger vehicle market. Till last year, Maruti did not have any significant presence in this segment, except for a limited number of petrol-powered Gypsys, which are sold mainly to the army and government agencies. But with the launch of Ertiga earlier this year, the share of utility vehicles in Maruti's overall sales jumped to about 7 per cent in the first quarter of this fiscal, from less than 1 per cent in the same period last year.
  
  Between April and June 2012, Maruti sold 18,960 utility vehicles (Ertiga and Gypsy), as compared with 1,491 units in the same period last year.