As marketshare dips, Maruti gets realistic, lowers target

Famed for making every second car sold in India, Maruti Suzuki has lowered its sales target to just 40% share in the domestic market as recurrent labour strikes and a lack of diesel engines in its stable weaken its hold.

The revision comes barely four months after Maruti launched its first utility vehicle, Ertiga, in April. At that time it had reiterated that its aim was 50% of the marketshare.

Maruti's share in the domestic passenger vehicle segment has traditionally been around 46%, which slumped to just 38.4% in 2011-12 as demand shifted dramatically to diesel cars.

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"We cannot be a predominantly petrol carmaker any more," Bhargava said. "By 2014, we should have a total capacity of 700,000 diesel engines."

He said the company would add capacity even more if needed. "We are also examining if we would need more diesel engine capacity beyond that, if the policy remains as it is today," he added.

The outlook for industry growth for this year does not look rosy either.

Maruti said sales have grown a little under 10% in the year so far and is expected to taper to 8-8.5% by the end of the year. Industry body Society of Indian Automobile Manufacturers has projected a 10-12% growth in car sales for 2012-13.

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