Maruti Suzuki to convey armada of SUVs to battlefront

NEW DELHI | MUMBAI: Maruti Suzuki is working on a pipeline of SUVs to be launched over the next few years, emboldened by the success of its Vitara Brezza in the quickest growing segment of the nation’s passenger vehicle industry.

The automaker is developing a large SUV, positioned above the compact Vitara Brezza to take on the likes of the Tata Hexa and Mahindra XUV 500, five people aware of the plans told ET. The vehicle is being developed on Suzuki’s Fifth Generation C Platform and is scheduled to go into production in 2020.

Studies are also going on to determine the feasibility of a small SUV, positioned below the Vitara Brezza.

“There are some opportunities developing in that kind of segments,” managing director Kenichi Ayukawa said, in response to a question on product plans.

“We have to study that well,” he said. “We have not taken a final decision yet.”

The Indian consumer’s increasing fascination towards utility vehicles has made it a crucial segment for automakers. Sales of utility vehicles expanded nearly 30 per cent to 7,61,997 units in the financial year ended March 31, outpacing the passenger car segment by a wide margin — car sales grew less than 4 per cent.

At Maruti, a key driver of its double-digit sales growth in fiscal 2017 was the Vitara Brezza. With sales of 1,95,741units, Maruti cornered a 38 per cent share in the entry UV space — with length of 4400 mm or less and priced up to Rs 15 lakh — which accounts for about two-thirds of the utility vehicle market. Vitara Brezza, in fact, sold more than double its nearest competitor, Ford EcoSport.

However, the company does not have any presence in the segments beyond, where volumes grew about 15 per cent last year. For Maruti and Japanese parent Suzuki, for which the Indian unit is a money-spinner, it is a space that can’t be ignored.

Maruti’s move to climb higher up theladder and close gaps in its product portfolio is a continuation of the strategy to retain within its fold the existing buyer base when they choose for upgrades, said Puneet Gupta, associate director at automotive advisory firm IHS-Markit. Maruti’s plan, the people ET spoke to said, is to offer products across the value chain. Part of it is an SUV-styled hatchback, codenamed Y1K, which maymake the entry in 2019 to take on the Renault Kwid. The company is also studying a separate architecture that could spawn out a small SUV and a hatchback.

That project, though, is at a very initial stage and a decision on it is yet to be taken, said one of the people. The SUV being developed on the Fifth Generation C Platform would be the company’s most ambitious attempt in developing a car upwards of the Rs 10 lakh-price segment since the crossover S-Cross and sedan Kizashi, both of which didn’t bring the kind of volume Maruti vehicles have usually seen.

The success of the Vitara Brezza, though, helped it challenge the leadership of Mahindra & Mahindra in the utility vehicle space. At the end of fiscal 2017, the gap between Mahindra and Maruti was just 27,000 vehicles in the segment. Mahindra had a segment share of 29 per cent and even as Maruti captured a fourth of the market in no time.

“Suzuki is betting big on the Indian subsidiary, which drives both sales and profit,” a senior industry executive who did not wish to be named said.

“Maruti Suzuki, in turn, is looking at growing annual sales to 2 million units by 2020. They are not leaving any stone unturned in addressing the requirements of Indian customers.