Celerio helps Maruti Suzuki increase market share

Maruti Suzuki shares have come under the scanner because of the auto maker's decision to source cars from a plant to be built by its parent Suzuki Motor Corp in Gujarat. (Read why)

On an operational front, however, Maruti is performing much better than its rivals, possibly on account of the hugely successful Celerio model.

Maruti's overall domestic volumes increased 2 per cent year-on-year in February led possibly by strong Celerio volumes, global brokerage Nomura says. Higher than expected volumes helped India's biggest car maker increase its market share to 52 per cent in February, the brokerage Nomura adds.

Maruti sold a total of 99,758 units in February, clocking 1.8 per cent year-on-year growth versus flat growth for rivals such as Hyundai. The domestic car industry saw an average growth of 2-3 per cent in February, Nomura estimated.

Last week, Maruti's chairman RC Bhargava told NDTV that Celerio is registering 1,000 bookings per day. This means the Celerio could end up with far more volumes that Maruti's current best seller Alto, which clocks sales of around 20,000-25,000 units per month. (Also read: Celerio debuts at Geneva Motor Show)

Some analysts had estimated the Celerio to sell around 5,000 units per month. In fact, even Mr Bhargava is surprised with the demand for Celerio's Automatic Manual Transmission (AMT) version, a technology the company has introduced for the first time in the mass segment in India. (Read the story here)

Maruti's internal estimates had pegged the Celerio's AMT variant to account for approximately 20 per cent of production, but the actual bookings for the automatic variant have crossed the 50 per cent mark.

Mahantesh Sabarad, deputy head (Research) at SBI CapSecurities told NDTV that Celerio's sales numbers are surprising and it has the potential to get 10 per cent additional volumes for Maruti for a few months at least.

The Celerio is all set to join a select group of cars that have a wait list at a time when the Indian car industry is in the midst of an unprecedented slowdown. Ford's EcoSport and Honda's Amaze and City models also have a wait list currently.

According to Nomura, Honda reported a growth of 120 per cent year-on-year, led by continued strong Amaze volumes and the launch of the new Honda City with diesel option. Ford's domestic volumes were up 51 per cent year-on-year, led by the EcoSport, it added.

The other factor that seems to be helping sales is the recent cut in excise duty from 12 per cent to 8 per cent. Nomura says customer enquiries have increased post the price cuts.

"This could lead to some uptick in volumes over the next 1-2 months, particularly for the cars and two-wheeler segments," Nomura analysts say.

Asia-Pacific focussed brokerage CLSA on Wednesday maintained its buy call on Maruti Suzuki saying the automaker's multiple new products are a trigger for the stock. The brokerage has a target of Rs 2350 on the stock, which indicates a 45 per cent upside from current levels.

Maruti shares closed 1.75 per cent higher at Rs 1,625.40 on the NSE, outperforming the broader Nifty, which ended 0.5 per cent higher at 6,328.65. (Track stock)