A quarter of Maruti Suzuki’s outstanding order book of 3.5 lakh units is from its newly-launched models including the Brezza at 70,000 units and the mid-size SUV unveiled 10 days ago, the Grand Vitara which has pre-booking order for 20,000 units.
Along with higher trims, these and other newer models account for 50 percent of the customer demand, the company's top management said in an analysts’ conference call.
Maruti’s leadership also addressed the debate of strong hybrids versus other fuels with Ajay Seth, Chief Financial Officer, saying that even though the response to strong hybrids is encouraging, the company is also considering extending the strong hybrids to the upcoming SUV line and even democratizing the technology for its existing models at the right time. The Grand Vitara has two strong-hybrid variants – Zeta and Alpha CVT.
"Like any other newer technology, we are happy that consumers are seeing the advantage of higher fuel efficiency strong hybrids have to offer. As they embrace the new technology, our economies of scale will kick in and increase the propensity to scale up such offerings to newer and exiting product lines," Seth said.
On the CNG price increase, he also indicated that Maruti has a full line-up of CNG models and the current price difference is a clear impact of the war, and the higher fuel efficiency of Maruti’s patented S-CNG technology will outweigh it in the long run. Seth further said that the weighted cost of GST+ cess for diesel vehicles is much higher than that of strong hybrids making it a better choice for customers.
Analysts also questioned Maruti's top management on increased discounting on the old models to which the management admitted that retail has been slower as compared to wholesales but “the discounting impact will be marginal".
On the export front company officials indicated that the weakening of the yen and the depreciating rupee will further add to the company's export revenues as with the introduction of newer models, the export opportunities will further increase. " the yen exposure has significantly come down to 3 percent with indirect exposure is around 85bn yen," the CFO explained.
The company which lags behind its rivals in the SUV space including the Hyundai Creta and more recent players such as Kia, aims to increase its 4 percent market share in the midsize SUV segment, and expects a 10 percent compounded growth of the segment over the coming few years.