Maruti Suzuki targeting double digit growth in FY15

India’s largest car-maker, Maruti Suzuki expects to grow its vehicle sales in double digits in 2014-15 on the back of several initiatives that it had undertaken.

Addressing a media round-table, Mayank Pareek, Chief Operating Officer, Marketing & Sales, Maruti Suzuki India, said the company was relying on initiatives like its car exchange strategy, niche marketing, rural thrust and product innovations to drive growth.

“In early 2013, we realized that FY14 was not going to be easy and we focused on distribution and pricing models. So although sales declined 6 per cent, our used car sales rose 16 per cent to 289,000 units.”

The company also focused on niche marketing having identified 372 niches like temple priests, blue pottery industry in Jaipur, and pharmaceutical retailers, selling 62,000 cars to these.

The company also offers customisation of vehicles with a range of 4,000 accessories.

In terms of dealers, Maruti has 1,331 main outlets and Emerging Market outlets (markets with more than 100 cars) and plans to double these in the next three years. It introduced the ‘R outlets’ for the rural markets this year and also 7,800 Resident Dealer Sales executive (RDSE) in villages.

Maruti’s rural sales went up from 3.5 per cent of sales in 2007 to 32 per cent in 2014. “We realized there was a big opportunity in the hinterland. In FY13, we sold 26 per cent of our cars in rural market in only 44,000 villages; 6.7 per cent of villages in India. In FY14, we sold in 94,000 villages. We can double or even triple this.”

In terms of servicing cars, he said Maruti Mobile Services (MMS) launched last year was very successful and has 1,031 Maruti Eeco vans to service vehicles all over India. Now every month 40,000 customers use this service.

On the diesel-petrol preference, Mr. Pareek said that while in November 2012 when the diesel-petrol price gap was Rs. 32, the diesel car share was 64 per cent, it tapered to 58 per cent in FY13 and to 54 per cent in FY14. “In April 2014, it was at 51 per cent and should hold.”

The parent Suzuki had last year indicated that Maruti’s export focus would be Middle East and Africa. While exports declined to 103,000 units (120,000) in FY14, “that was because we discontinued sales to Europe but going forward, we should see a pick up in numbers from South Africa, Algeria, ASEAN, South America and Israel. In FY15 we should be able to maintain exports.”