Brezza, Vitara help Maruti Suzuki gain more space in SUV market
The strong demand for the two vehicles, with the company currently sitting on more than 140,000 bookings for the new breed of SUVs, also highlights Maruti Suzuki’s increasing acceptance among Indian buyers who want to upgrade from hatchbacks like the Swift and Baleno to a more spacious, modern and safer vehicle.
It has already delivered about 45,000 units of the Brezza. Deliveries are yet to start for the Grand Vitara. Also, most of the bookings are for higher-end variants. That means the average selling price per vehicle, and the margins too, for the Suzuki Motor unit are set to increase. Its revenue market share is also set to expand as a result.
According to people in the know, the new Brezza and the midsize Vitara are likely to have a blended average price of nearly ₹15 lakh a unit, thanks to a large share of booking at the top variant of the Vitara. This translates to an outstanding order book of more than ₹25,000 crore, conservatively, for new-generation SUVs alone. This is about a quarter of the company’s estimated revenue for this fiscal year.
If the other two models launched this fiscal year – the new Ertiga and XL6 – are also included, Maruti Suzuki is sitting on cumulative outstanding bookings of 240,000 units for utility vehicles alone, worth about ₹35,000 crore. Shashank Srivastava, Maruti Suzuki’s senior executive director (sales and marketing), said the company introduced new SUVs in the market as consumer demand was increasing for such vehicles, and that it would launch more models in the space in the near future.
“The bookings for our new Brezza and Grand Vitara have been really encouraging,” he said.
Strong demand for the new models is expected to double Maruti Suzuki’s annual SUV sales to about 300,000 units.
To be sure, the average selling price in the industry has also been increasing, driven by higher raw material prices, cost of meeting stringent regulatory requirements and increase in taxes. Also, consumers are now choosing cars that come with more features and are therefore pricier, said Srivastava. “In line with this and also of our new portfolio construct, our average selling prices have also gone up,” he said.
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