Maruti Suzuki:: Honda launches hatchback brio - pricing is aggressive :: JPMorgan

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 Competition intensifies in the Domestic Car market with Honda
launching its small Car Brio today. The product is priced competitively
between Rs 395,000 and Rs 510,000.
 Toyota had recently launched Toyota Etios Liva Hatchback at
Rs.440,000 (priced lower than the Maruti Swift).
 The Small Car segment is already competitive with Hyundai's i10,
Maruti’s Wagon R, Toyota’s Etios, Ford’s Figo, Nissan’s Micraa and
GM's Beat amongst other OEM's.
 Maruti has ceded share to competition. The OEM's market share is
down 420bps YTDFY12 ceded to global OEMs such as Toyota and
Volkswagen. Production has also been impacted by the ongoing labour
unrest in Manesar.
 Implications for Maruti: We believe competitive intensity will increase
further with the launch of Honda Brio which has been priced
competitively. The industry has already lowered its growth outlook to
low single digits for FY12 given slowing demand. We continue to see
near term headwinds for Maruti.