Maruti Suzuki has been the market leader in the passenger car industry in India for decades. Due to its preeminent position, it is the strongest brand name in the Indian car market.
That said, if you have a trading account, you must be wondering whether to invest in this stock or not. Whether to invest in it or not depends upon many factors, including Maruti’s share price.
Top Features and Benefits of Maruti Suzuki
Here are the benefits of investing in Maruti Suzuki:
1. Dominant market leader
Maruti Suzuki’s market share in India’s passenger market stood at 40.07% in July 2024. The second largest car brand, Hyundai, had a market share of 14.29%. This shows that there is no close second to maruti share price in the Indian car market as far as its market share is concerned.
While the car market is growing in India, still per capita numbers show that fewer cars are sold in the country than in developed markets like the US, UK, Germany, Japan, etc.
Hence, the growth potential is immense. As more people buy cars in India, Maruti Suzuki, being the market leader, will definitely be a beneficiary of market growth.
2. Deep understanding of the Indian car market
Few brands have as deep an understanding of the Indian car market as Maruti Suzuki has. Its amazing knowledge of the market has helped it launch new cars successfully. When it comes to head-to-head competition with rival car manufacturers,
Maruti Suzuki often ends up beating them easily. Who can forget how Maruti’s hatch Swift had thoroughly beaten Hyundai’s hatch called Getz to such an extent that it was not easy to spot a Getz on Indian roads?
3. Growth trajectory
Typically, market leaders grow at a slow rate due to their high base. However, this is not the case with Maruti Suzuki, as it is growing rapidly. Between FY 2019-20 and 2023-24, its consolidated net sales and consolidated net profit grew at a compounded annual growth rate (CAGR) of 17% and 24.2%, respectively.
These numbers are based on the data disclosed by the company to the Bombay Stock Exchange (BSE). These growth rates clearly show that Maruti Suzuki has not let its size of operations affect its growth.
4. Focus on premium cars
Once predominantly a small car manufacturer, Maruti Suzuki has been focusing on premium cars for some time now. Focusing on premium cars helps it improve its margins. For example, Maruti is present in the compact sports-utility-vehicles (SUV) segments through its cars like Vitara, Brezza, and Fronx.
It is also present in the sedan segment, thanks to Ciaz and Dzire. In Baleno, the company also has a premium hatchback. While the company is paying attention to premium cars, it also maintains its presence in the affordable segment of the market.
For example, Alto is still a leading car in the entry-level hatchback segment. In the compact hatchback segment, Swift, WagonR, Celerio, and Ignis continue to do well. The manufacturer has a presence in all the segments of the market with growth potential.
5. Country-wide sales and service network
Maruti Suzuki has the widest network in India in the passenger car industry. Its annual report for FY 2023-24 revealed that Maruti has 4,964 touchpoints and 409 mobile workshops across India. Further, it has deployed 781 vehicles for quick response across the country. Such a wide network helps it address the issues of its customers efficiently.
Conclusion
There are many benefits of investing in Maruti Suzuki. However, if you want to buy its stock, use a trading account. You should analyse whether it makes sense to invest at the current Maruti’s share price. For this, you should compare its financial ratios like price-to-earnings (P/E), return on capital employed (ROCE), return on investment (ROI), etc. with its competitors and then take a call.