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Hit Machine

Maruti Suzuki boasts of cars that have not only become hits, but have also become household names all across India

Maruti has hit the jackpot with the Celerio AMT. The Celerio AMT bagged 45,000 bookings, much higher than the 5000 units Maruti had allocated for it.

This is not the first hit for Maruti. Successive hits starting with the Maruti 800 in 1983, the Maruti 1000 in 1989 and the Esteem in 1994 have put the company's indelible mark on the Indian automobile space.

Even today after Indian masses have warmed up to a whole host of foreign car manufacturers, Maruti has cornered half of the domestic passenger vehicle market for itself-and its holding the fort strong. It remains the largest passenger vehicle manufacturer in India.

One of Maruti's biggest competitive advantages is its extensive distribution and service networks with more than 1,300 dealers and over 3,000 service outlets in around 1,450 cities.

Rural penetration is another advantage Maruti has over its peers. No other car manufacturer comes close to the company as far as rural push is concerned. Out of 6.5 lakh villages in the country (with a population of less than 10,000), Maruti is already present in 94,000. The rural push is paying off well. Rural sales accounted 32 per cent of the company's 2013 sales-up from 3.7 per cent in 2007.

Short term hiccups. Automobiles are highly cyclical in nature and sales are linked to GDP growth. The economic slowdown in the last couple of years saw the auto sector including Maruti face one of the worst slumps in a decade. Things have started to look up. May numbers for Maruti saw domestic sales up 16 per cent higher than May of last year. The small car segment put on the best show with sales up 53 per cent, one of the first moving segments in a recovery.

Buy Maruti but be ready to see both stretches of up years and down years. It will take years for any other automobile manufacturer to dethrone Maruti from its position.