Maruti Suzuki's first crossover Maruti Fronx 2023, aimed at highly competitive models in the compact SUV segment such as the Tata Nexon, Maruti Suzuki Brezza, Nissan Magnite, Renault Kiger, Hyundai Venue and Mahindra XUV300, has a waiting period of 2.5-3 months at present.
The segment averaged sales of 84,000 units per month in FY23 and continues to see strong consumer demand, Nomura India said in its latest note on Maruti Suzuki.
Price comparison with Baleno, Brezza
Compared to the Baleno, the base variant of the Maruti Fronx 2023 SUV is priced at Rs 7.46 lakh at a premium of Rs 86,000 per unit, while the SUV is priced at a discount of Rs 83,000 per unit to the Brezza.
“In terms of the performance offered by the two engine options, we believe the prices of the 1.0-liter Turbo Boosterjet 1.0L engines are higher than expected. We expect, based on price and performance specifications, that the bookings the company receives will lean towards the 1.2-liter twin-jet option,” Nomura India said.
Cannibalisation risk
Nomura India said its analysis of pricing, compared to the Maruti Suzuki and its peer models, indicates that while the Maruti Fronx is slightly below the Nexon, there is a reasonable premium (Rs. 1,00,000 on-road) compared with the Baleno for the entry/mid variants.
“However, with the turbocharged variants only available on the Zeta/Alpha models, the Baleno's price premium is large and very close to the Brezza. Therefore, there may be a risk of cannibalizing from Baleno at the lower end and the Brezza at the higher end.” We are currently looking at 8,000 units. per month for Maruti Fronx in FY24F (6,000 units per month incremental for Baleno + Fronx), which could have some risk given the price," it said.
The SUV features a two-tone interior with a 9-inch touchscreen infotainment system with wireless Apple CarPlay and Android Auto, wireless charging, cruise control, a 360-degree camera, a head-up display, and over 40 connected car features.
It has several safety features such as six airbags, Electronic Stability Program (ESP), Hill Hold Assist and Rollover Mitigation, ABS with Electronic Brake-force Distribution (EBD), and ISOFIX. On the exterior design front, the upright nose and split headlamp of the Maruti Fronx 2023 are inspired by the Grand Vitara, while some elements, such as the rising waistline and sloping rooftop, are Baleno-inspired, Nomura India noted.
The brokerage maintained its 'Neutral' rating on the stock with a price target of Rs 9,928.
Meanwhile, Motilal Oswal Securities suggested in an earlier note that Maruti Suzuki could outperform the base industry in FY24, led by Jimny and Fronx and, the successful launch of the Grand Vitara in September 2022.
It said that while the launch of the Grand Vitara and the upgrade of the Maruti Brezza were successful, they did not have a significant impact on Maruti's recovery of household PV market share.
“While MSIL’s market share in the SUV segment improved to 20% in Q3FY23 (from 19.5% in FY22), it lost market share in the auto segment (64.1% in Q3FY20). FY23 from 65.8% in FY22), driving market share down to 41.2% in Q3 FY23 (from 43,4% in FY22) with three more product launches in the SUV segment growth over the next six to nine months and we expect MSIL's market share recovery to gain momentum."
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