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Last Updated : Oct 15, 2015 06:11 PM IST | Source: CNBC-TV18

Good response for Baleno, could aid market share: Maruti

RS Kalsi, Executive Director-Marketing & Sales, Maruti said the company is committed to double-digit growth in FY16.


Maruti Suzuki is all set to export a `Made in India' vehicle, the premium compact 'Baleno' to Japan, to be sold by its parent Suzuki. The car will make a debut on October 26.

RS Kalsi, Executive Director-Marketing & Sales, Maruti is happy with the response Baleno is drawing but said it would not be appropriate to talk on the sales in number terms yet.

When asked if he saw uptick in the market share from the current 47.6 percent that the company holds, he said market shares are basically determined by what the competition does; adding that introduction of this premium hatchback could add to the momentum and may enhance the market share.

He said the company is committed to double-digit growth in FY16. For the first half Maruti clocked a growth of 12.7 percent, which could be replicated in second half too, he added.

Baleno is set to compete with Hyundai's Elite i20 and Honda's Jazz and will have a 1.2litre petrol engine (manual and automatic variants) and 1.3-litre diesel engine.  Baleno has been developed for the global markets and India will be the exclusive manufacturing hub for the car.

He was not overly worried about the lack of response to the premium sedan S-Cross, stating that the sales were in line with company plans and in two months they had sold about 10000 cars. It is important to look at sales of any car from a six month perspective, he added

The company is not offering any major discounts apart from the basic Rs 20000 on S-Cross.

Suzuki which controls 56% stake in Maruti, has decided to make India a global manufacturing hub for its upcoming premium compact car `Baleno', which will be exported to over 100 countries, including the Western European nations.

This will be the first instance of Maruti - which contributes 40% to Suzuki's global sales volume and one third to its revenues -supplying a car to its parent for and manufacturing teams of the company see this as a "big achievement". Apart from Japan, other countries where the Baleno will be sold include, Italy, France, Germany , Netherlands, Belgium, Denmark and Spain. In South America, it will be sold in Chile, Paraguay and Colombia.

Below is the verbatim transcript of RS Kalsi’s interview with Reema Tendulkar & Sonia Shenoy on CNBC-TV18.


Sonia: The bookings have already opened up and there is a lot of buzz around the new Baleno. Can you tell us what exactly the monthly run rate could look like? What is the company guiding for?


A: Before I get on numbers, I would like say that we had a global premier of this car in Frankfurt couple of weeks ago. We are having various previews by auto journalists as well as business journalists since last three days and everybody is excited about the car, its features and the design that we are bringing in. So, we are excited to know the fact that we are making a debut of this car from India and its being launched as a global model.

Close

As far as the numbers are concerned, we are very optimistic about it. To talk anything about numbers at this point of time would be premature because we have plans to open the bookings only two days ago and the launch would happen on 26th. So, may be couple of weeks down the line it will be appropriate to talk about the numbers.


Reema: Do you think it will be able to equal the response that you got for your Swift brand where you are clocking in a sales run rate of closed to about 17,000 cars per month?


A: It builds up over a period of time and as we launch it and we get similar kind of response from the customers as we have got from auto experts and business journalists and our dealers. So over a period of time we will get the numbers which will get ramped up and there would be incremental numbers on market in terms of our overall portfolio.

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Sonia: Can you just tell us about what the market share in the domestic space will look like in the next three to six months? You are already sitting on 50 percent plus market share but given that you have many new launches how much do you think the market share could be by the end of the year and by the end of the fiscal?


A: Let me first correct you, we are today at 47.6 percent market share which is 2.7 percent up compared to last year. However, market share is something which is also determined by how our competition does. As far as we are concerned we are committed to a double digit growth which we declared at the beginning of the year and at that point of time introduction of these models was taken into consideration. Today we are at 12.7 percent growth and we will maintain that kind of a momentum for H2 as well.


Sonia: From this 47.6 percent that you are currently how much do you think you could get to by the end of the year?


A: As I mentioned market share depend a lot of how the competition does, apart from how the market fairs. So, it would be difficult to put any exact number of that. However, introduction of a premium hatchback would certainly be an advantage. It would further add to the momentum that we have so far generated in terms of enhancing our market share in H1 by 2.7 percent.


Reema: In the past the brand Baleno didn’t click with the consumers. Do you fear that the brand will be an overhang on this new product that you are looking to launch?


A: I don’t think so, Baleno is an Italian word which stands for flash of light and it is global brand that we are introducing. It has absolutely no connectivity with the earlier product that we had in the market place. To think of it that was a Sedan and this is a new premium hatch version. So, there is absolutely no resemblance with earlier product and this is altogether new product. So, we don’t think so there would be any backlash because of this brand name Baleno.


Sonia: Coming to the S-Cross, there has been some pressure seen on S-Cross because of competition like the Hyundai Creta. How much have the S-Cross sales fallen to on a monthly run rate and what are you guiding for in terms of an average for S-Cross sales going ahead?


A: First two months we have sold closed to 10,000 numbers which is exactly in line with our plan that we had in the beginning. It takes about six months to totally understand how our model is doing in the market in terms of its acceptability. So, we are quite optimistic moving forward as far as S-Cross is concerned.


Reema: Are you looking to offer any kind of discounts on S-Cross and generally how the discounts been?


A: Discounts are controlled by the market forces and these are some sort of technical corrections from time to time if a particular variant or particular model, inventories are piling up. So, in order to do that market correction the discounts were given. Otherwise one cannot say that there would be discount on a certain model or there will not be any discounts on another model. Within the model there may be discounts on the variants depending on how the market is behaving.


Sonia: So you continue to give Rs 1 lakh discounts on the S-Cross?


A: No. In the first place it is not Rs 1 lakh it is Rs 20,000 exchange bonus and another Rs 50,000 for the customers who are taking finance from the dealership. If a customer is not taking finance then for him the discount is confined to only Rs 20,000. It is only, there is a little bit of correction with respect to a particular variant.


Sonia: The September sales did see just about a 3.7 percent growth and you saw a big crack in the export numbers in September what is the trend looking like for October and November. Do you think it could get better or do you still expect some pressure from export markets?


A: I would like to say one should derive any conclusions on a month-on-month basis because there are couples of factors. If I first touch upon say domestic markets last year in September we had Navratra’s. This time towards end we had Shrad so that kind of variable exists in that domestic market.

Also moving forward I would like to say that last time we had festivals season Dussehra as well as Diwali in October. This time it is spread into October and November. So it is should be seen in conjunction to that, in terms of monthly numbers. As far as exports are concerned it is only on account of the shipment delays nothing else.



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First Published on Oct 15, 2015 10:45 am
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