Maruti Suzuki Expands Focus Beyond Top 10 Markets to Boost CNG Car Sales
Maruti Suzuki India Limited (MSIL) is setting its sights beyond its top-performing states to accelerate the growth of its CNG car segment. Currently, 90% of the company’s CNG vehicle sales come from the top 10 markets, which include states like Maharashtra, Gujarat, Uttar Pradesh, and Haryana. However, the company is now targeting the “next top 10 markets” to expand its presence in collaboration with gas distribution companies.
Strong Growth in CNG Sales
In the first half of FY25 (H1FY25), MSIL sold approximately 281,000 CNG cars, marking a robust 28.4% year-on-year (YoY) growth compared to 218,000 units sold in H1FY24. This growth is a bright spot in an otherwise sluggish passenger vehicle (PV) market, where overall sales increased by only 0.5% YoY, according to the Society of Indian Automobile Manufacturers (SIAM). In contrast, MSIL’s overall PV sales dropped slightly by 0.3% YoY to 844,614 units during the same period.
Expanding Market Focus
MSIL is now focused on strengthening its presence in its existing strongholds while penetrating new territories. Partho Banerjee, Senior Executive Officer (Marketing and Sales) at MSIL, revealed, “We are working closely with CNG distribution companies to expand into the ‘next 10 states,’ where there is growing interest in setting up new CNG stations.”
The top 10 states for MSIL’s CNG car sales include Maharashtra, Gujarat, Uttar Pradesh, Haryana, Delhi, Rajasthan, Karnataka, Madhya Pradesh, Tamil Nadu, and Telangana, with a CNG penetration rate of 43.9% till October FY25. The next set of target markets—Punjab, Bihar, Kerala, Andhra Pradesh, West Bengal, Uttarakhand, Jharkhand, Odisha, Tripura, and Chandigarh—currently have a penetration rate of 13.3%.
Strategic Marketing Approach
To drive sales in these emerging markets, MSIL has devised a joint marketing strategy with CNG distribution companies. This includes a mix of Above-The-Line (ATL) activities like print and media advertisements and Below-The-Line (BTL) efforts, such as promotional events at CNG pumps and car showrooms.
Consumer Shift Towards CNG Vehicles
The rising demand for CNG cars can be attributed to several factors. Rahul Bharti, Executive Director of Corporate Affairs at MSIL, highlighted during an investor call on October 29, “Today, the country has about 7,000 CNG stations, and this number is expected to grow to 17,000 by the end of the decade. Consumers are increasingly recognizing CNG as a quality fuel, not just an economical option.”
CNG vehicles offer a lower carbon footprint, aligning with environmental goals, and are now gaining acceptance even in premium segments like SUVs. Additionally, MSIL continues to expand its CNG offerings, with the recent launch of the factory-fitted S-CNG powertrain in the 4th generation Swift. This addition brings MSIL’s total S-CNG model lineup to 14, the most comprehensive in the industry.
Future Outlook
Maruti Suzuki’s push towards CNG reflects its confidence in the fuel’s growing popularity. With increasing infrastructure and a broader model lineup, the company is well-positioned to capture demand in both existing and emerging markets. This strategic shift is expected to play a crucial role in shaping the future of MSIL’s growth and sustainability initiatives.
Stay updated with more insights like this on TradingThought!
