In the Q2 FY24 conference call, Maruti Suzuki discussed key highlights, market trends, and future strategies amid changing dynamics in the automotive industry.
Market Performance:
1. The industry experienced a 5% YoY growth, reaching 10.2 lac cars in Q2.
2. Maruti Suzuki outpaced the industry, achieving an 8% YoY growth in volumes and gaining market share.
Shifts in Market Dynamics:
3. Utility Vehicles (UVs) now constitute 50% of the total car market, with Multi Utility Vehicles (MUVs) and UVs representing 60% of the entire market.
4. The share of Compressed Natural Gas (CNG) and Hybrid vehicles is increasing, while Diesel engine shares are declining.
Supply Chain and Production:
5. Improvement in the chip supply situation, with no reported production volume losses.
6. Maruti Suzuki sold 5.52 lac cars in Q2, reflecting a 6.7% YoY growth.
Sales and Pricing Strategies:
7. Sales growth outpaced volume growth due to strategic price hikes and increased sales of high-value cars in the UV segment.
8. Favorable commodity prices and operating leverage contributed to Maruti’s positive Q2 performance.
Market Share and Future Growth:
9. Maruti Suzuki commands a 23% market share in the SUV space.
10. The company aims to grow in line with the industry in the upcoming quarters.
Rural vs Urban Dynamics:
11. Rural growth slightly outpaced urban growth, indicating evolving consumer preferences.
Transition to Electric Vehicles (EVs):
12. Maruti Suzuki is planning a transition to EVs over the next 6 years, introducing six new models to align with the evolving automotive landscape.
Challenges in Small Car Segment:
13. Challenges persist in the small car segment, driven by regulatory cost increases and a lag in income levels catching up. The share of small cars in the industry decreased to 28% from 34% last year.
14. The share of first-time buyers is declining for Maruti, highlighting changing consumer trends.
Industry Growth and Future Outlook:
15. Despite a 4% Compound Annual Growth Rate (CAGR) in the last 5 years, the car industry’s overall growth is deemed disappointing for a country like India.
16. Only the top 3% of the Indian population currently owns a car, emphasizing potential for future growth.
In conclusion, Maruti Suzuki’s Q2 FY24 conference call outlines the company’s proactive stance in navigating market shifts, embracing new technologies, and addressing challenges to ensure continued growth and relevance in the evolving automotive landscape.