Having increased prices five times in the past 15 months with the latest hike coming into effect earlier this week, car market leader Maruti Suzuki’s image as one of India’s most affordable car brands is taking a beating.

Blaming raw material costs and usage of upgraded technology for the overall escalation in costs, Maruti Suzuki, which sells two out of every five cars in the country, said it is striving to provide access to personal mobility for everyone in India for which it is pushing its engineering resources for cost-effective solutions.

Hisashi Takeuchi, Managing Director and CEO, Maruti Suzuki India said, “Input costs are increasing and cost of new technology is also very high but if we give up then our activity will stop. We have to keep challenging those tasks(of costs). The core of our company is not just for a limited number of people. Mobility is for all Indians.”

New XL6 launched

Maruti Suzuki on Thursday launched the 2022 XL6, a premium alternative to the Ertiga, sold through the Nexa series of outlets. With the top variant priced at ₹14.55 lakh and the entry level one at ₹11.29 lakh, the XL6 is the most expensive model in the company’s line-up.

“Those technologies may be very costly but down the line we will bring it down by tapping into our engineering resources. We are not pessimistic about our future. Small cars best suit Indian society and are good for the environment also,” Takeuchi added.

There has been an average of 5-8 percent increase in prices of cars since January 2021 not just of Maruti Suzuki but of the industry. The cost of the Swift, one of Maruti’s highest-selling models, has seen a jump of nearly 8 per cent in price, which includes the hike due to model upgrade done in February 2021. From ₹5.49 lakh in 2020, the price of the Swift currently is ₹5.92 lakh (ex-showroom, Delhi).

Drop in market share

FY22 was a challenging year for Maruti Suzuki as the company reported its single biggest slide in market share in a year. The company closed the year with a share of 43.38 percent which was at its worst level since FY14. The Delhi-based company blames shortage of semiconductors for the fall in market share.

The company saw sales of 1.33 million passenger vehicle units in the domestic market in FY22, an increase of 3 percent compared to 1.29 million units sold in FY21, as per numbers disclosed by it.     

Related Topics