It seems that the two facts where Maruti's market share went below the 50% mark and lower than expected quarterly results have taken its own toll from the company. Under a recent move, UBS has downgraded the stock of the leading Indian car maker Maruti Suzuki to 'neutral' from 'buy'.

Moreover, the company has also cut the 12-month target price on the stock to Rs 1,550 from the earlier targeted Rs 1,750. Suffering from the high input costs and royalty payments, the stock of the company dropped more than 10 per cent after it reported a surprise 20 per cent fall in quarterly net profit.

The increasing competition in the A2 segment where the company banks most of its volumes from is also being considered as a long-term threat for the passenger car maker. Moreover, it is believed that the jump in royalty expenses would lead to a sharp reduction in margins for the car maker. It's clearly the result of its over-reliance on the parent company.

The company is expected to launch the new Alto with a K-series engine in the Indian market in August this year.