Maruti Suzuki, India's car market leader but lagging Ford Motor Co., Renault SA and others with new models in the fast-growing SUV segment, launched a crossover vehicle on Wednesday that aims to support ambitious sales growth plans.
Maruti has set a target of nearly doubling its annual sales to 2 million vehicles by 2020, when analysts expect India will become the world's third-largest auto market with sales of more than 5 million vehicles despite sluggishness in recent years.
"We are taking various initiatives to achieve this goal. An important initiative is launching new cars and entering new segments," managing director, Kenichi Ayukawa told reporters at the launch of the S-Cross - a crossover between a sport-utility vehicle (SUV) and a sedan.
Consultant IHS Automotive forecasts compact SUV sales in India to reach nearly a million vehicles in 2020, or almost double 550,000 it expects to be sold in 2015.
Maruti launched its premium Ciaz sedan last October and has on average been selling about 5,000 a month, while monthly S-Cross sales are targeted at 4,000 - both well below the 20,000 average for its flagship Alto small cars.
The company's dominance in India and the strength of its parent, Japan's Suzuki Motor Co., in small cars for emerging markets were key factors behind an investment in Suzuki by U.S. activist investment fund Third Point LLC, which was revealed in a letter to investors on Friday and could be worth almost $1 billion.
The base diesel model of the S-Cross will be priced at 834,000 rupees ($13,070) and will be sold through a new network of showrooms for premium models.
It will compete with Ford's EcoSport, Renault's Duster and the recently launched Creta compact SUV from Hyundai Motor Co., India's No. 2 car seller.