Maruti Suzuki's poor run persists: 111,014 units in June (-17%), 363,417 units in Q1 (-21%)

Maruti Suzuki India, the passenger vehicle market leader, is seeing tough times, the likes of which it has never seen before. A combination of growth-impacting factors like stifled consumer sentiment, aggressive new competition, the company's recent decision to duck out of diesel and the flaggging economy are hitting the car maker hard.

As per the June 2019 and the Q1 (April-June 2019) sales numbers released today, it's amply clear the company will have to re-strategise hard to revive its sales. Its PV sales in June 2019 at 111,014 units are down a substantial 17.2 percent on the year-ago sales (June 2018: 134,036). The monthly number is the lowest of the first three months in FY2020: April 2019 (131,385 units / -19.6%) and May 2019 (121,018 units / -25%).

This straight three month-on-month declining sales trend is reflected in the Q1 FY2020 numbers: at 363,417 units, it marks a year-on-year sales decline of 20.8 percent. That's not all. The red ink is spread across all PV sub-segments both in June and for Q1. Take a close look at the sales statistics below and you get an idea of how the company is faring.

All PV sub-segments in the red
What's worrying for the company is that demand for its products is down across all PV sub-segments. In the first quarter of April-June 2019, the bread-and-butter Alto and old Wagon R hatchback sold a total of 57,893 units (-44.9%). The six-model set of compact cars (New Wagon R, Celerio, Ignis, Swift, Baleno and Dzire) saw despatches of 205,178 units (-11.8%) while the premium Ciaz sedan at 8,703 units (-18.8%) saw demand flagging.

Maruti Suzuki's utility vehicles, once a powerhouse of growth led by the Vitara Brezza, account for 58,984 units (-10.3%) and the Omni and Eeco vans at 32,659 units, are down 27 percent year on year.

Maruti Suzuki started supplying the rebadged Baleno hatchback to Toyota Kirloskar Motor as the Glanza in April and since then has delivered a total of 4,496 units till end-June.

The sole domestic market positive for the company in June and Q1 is sales of its sole commercial vehicle, the Super Carry: 2,017 units in June (+24%) and 6,568 in Q1 (+34.8%), albeit both are on a low year-ago base.

On the export front, Maruti Suzuki shipped 9,847 units (+5.7%) in June and a total of 28,113 units in April-June 2019 (+5.5%).

Put domestic and exports together for first three months of FY2020 and you get a cumulative total of 402,594 units (-17.9%).

2 million PV target in FY2020 looks difficult 
Given the current sales trend and shifting consumer preferences, Maruti Suzuki India, which had targeted combined domestic and export sales of 2 million PVs in FY2020, looks unable to achieve that 2020 sales vision unless there is a dramatic change of fortunes.

From the industry perspective, Maruti Suzuki's market performance reveals that consumers are just not biting, despite the handsome discounts available. What's more, with a gaggle of new products rolling in, particularly in the SUV space, the company will finding the coming months even tougher. But tough times call for tough measures, so expect Maruti Suzuki to take corrective measures to both protect its turf from new marauders and also think afresh to woo the finicky Indian consumer.