Maruti Suzuki’s fleet sales down; records best-ever subscription numbers in June
Fleet sales now contribute 4.5 percent of total volumes, declining from 6-7 percent of pre-Covid levels.
Maruti Suzuki India (MSIL) is witnessing a shift in the industry dynamics, wherein the once-booming trend of shared mobility is now on the backburner, and people are again preferring to have their own vehicles.
The ride-hailing industry in India with its two aggregator majors – Ola and Uber – went through an upheaval during the pandemic that left most cab owners who were signed up on these app-based platforms, high and dry for the better part of the last two years, due to lack of sustainable business. Many eventually defaulted their vehicle EMIs, and with no source of stable income, were forced to look elsewhere for a living.
With an overall cut down of the fleet, operational challenges at these cab aggregators are now surfacing and it has been a common problem in recent months in key metros, including Delhi and Mumbai, to find a cab in time, and also face resistance from drivers who tend to cancel an online booking if the destination is not to their liking. To add fuel to fire, users have also been witnessing things like the ‘No AC’ campaign run by drivers to protest against the rising prices of CNG.
The Maruti Suzuki Wagon R CNG, now available as the Tour H3 for fleet-only customers as well as the Tour S sedan, are the top choices of cabbies across prime cities for fleet deployment, given that these cars come with factory-equipped CNG, as well as the mandatory speed governor.
According to Shashank Srivastava, senior executive director, Marketing and Sales, MSIL, “Our fleet sales used to be about 6-7 percent of our total volumes, but they declined to almost 1 percent during Covid.” The carmaker, however, saw the numbers picking up with sales of its models meant for fleet-only registration coming to about 4.5 percent in 2021, “which is still less than the pre-Covid levels”, Srivastava mentioned. The company clocked total sales of 122,685 units last month, down 1.3 percent over June 2021’s 124,280 units.
“Psychological scars of personal safety are still in people’s mind, and even if Covid starts receding, that memory and scars will remain, pushing them away from shared mobility and public transport, and have some extra inclination towards personal mobility. I think it is something that will stay for some time,” said Srivastava.
While it might be an area of concern for cab aggregators, for MSIL, it’s business as usual as the company is able to compensate for the loss of fleet volumes, through the rise in demand for personal vehicles. “Shared mobility coming down doesn’t always hurt us as it gives a fillip to personal mobility, and there’s a positive push to our volumes,” he added.
Maruti Suzuki Subscribe on a roll
On the other hand, MSIL is seeing reasonable growth in its subscription programme – Maruti Suzuki Subscribe – which recorded its best-ever performance in June 2022, with over 350 new ‘users’ joining the platform. The Baleno premium hatchback, Dzire compact sedan, Ertiga MPV and the Swift hatchback are the top-four models to be subscribed by MSIL customers, who are increasingly becoming open to the idea of getting into a non-committal, usage-based subscription plan of their car rather than owning it completely. For instance, the newly-launched Brezza compact SUV can be availed for a monthly subscription fee of Rs 18,300 that includes the cost of vehicle, registration, maintenance, road-side assistance and insurance.
On July 4, the company completed two years of its subscription programme that allows customers to opt from a range of Maruti vehicles for multiple tenure options, for an all-inclusive fixed monthly rental. Once the tenure is over, the customer can either switch over to a new car or avail the option of purchasing the subscribed car.
In 2021, the programme saw over 1,600 customers - majorly IT professionals and those with transferable jobs – signing in to the platform, making the company's subscription model average around 133 new subscribers in each month last year. It, however, had a slow start, finding only 180 takers in the launch year of 2020 which was also marred by the pandemic, therefore registering a notable growth of 800 percent. According to Srivastava, "We currently offer the subscription programme in 20 cities, growing from 15 cities in 2020, and we plan to expand it further. We are consolidating the operations right now."
While cars under the Maruti Suzuki Subscribe programme are being offered with either a white number plate or black number plate option, the company is trying to offer a self-drive rental option and used-car subscription as well. These are areas that startups such as Revv, Zoomcar and PumPumPum have already ventured. “However, there are certain legal and tax constraints that need to be sorted out," Srivastava signs off.
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