Passenger vehicle leader in India, Maruti Suzuki is expected to make a great comeback this year with new launches with a special focus on the SUV segment. Over the next 18 months, Maruti Suzuki will come up with the launch of the new Brezza, mid-size SUV, entry-level SUV, Jimny, and large MPV which will help them improve its market share. The impending SUV launches should not only help them gain back the volume share lost in FY22, but more importantly, improve realizations and, hence, value market share as per brokerage firm HSBC. The company’s value market share is now in the 30 percent to 34 percent range vs volume share of 40 percent to 45 percent. India’s PV market is premiumising and, hence, tracking value market share is equally, if not more, important than volume market share says HSBC.

In recent times, the company’s volumes of existing products have also improved with a 7 percent growth sequential growth in May. The demand seems to be returning in passenger vehicle space with the company specifically sitting at 320k of order book, providing 2 months of cushion. While the entry-level segment continues to be under pressure due to higher cost of the vehicle as well as high fuel prices but if we see their CNG sales then that continues to support them fully with continued demand.

Going forward the analyst does expect the margins of the company to improve from the historically low levels of FY22 supported by lower steel prices and increased volumes. As per Jefferies, the Maruti Suzuki Electric Vehicle strategy would be key to the longer-term franchise as well.