What Maruti also needs to do is to straddle across segments with its models. Priced between Rs.3.39 lakhs and Rs.5 lakhs, the Hyundai i10 caters to a variety of customers. Maruti has never adopted this strategy even though it has the capability to do so. Its best-selling, Alto, came in two versions and one of them was discontinued; even Zen and Wagon R come in no more than three variants.
Right now, Maruti seems to be into the same problem which Europe’s largest car maker, Volkswagen, got into, when it launched the Phoeton luxury sedan (based on the Audi A8). It was perceived to be a wrong move for a company that was synonymous with mass models like Golf and Jeta. In fact, Volkswagen literally translates into ‘the people’s car’ in German. Therefore, VW’s objective to establish itself as a company that was technologically capable of slugging it out in the luxury segment did not succeed. What it did was to retain several brand platforms – each catering to different consumer segments.
Explains Dhawan, “The problem which Maruti faces can be solved easily. It should have diversified brand platforms, which can be anonymous to Maruti Suzuki. It can be a strategy similar to the manner in which Toyota sells Lexus in developed markets, while being disassociated with the brand.”
But there’s an area where Maruti is miles ahead of competition – after-sales service. This may prove to be the deciding factor. Vaidya feels that “the transition from ‘products’ to ‘brands’ has been completed in India. “The intangible offerings have gained as much importance as tangible product features. Monitoring customer satisfaction periodically is also very critical. It should be ‘customer care’ rather than mere after-sales service. Raison-de-entrée of this function should be customer delight,” he wrote. Not surprising, therefore, that most analysts have a ‘buy’ on Maruti stock. “I think the prospective price hike and future product mix will increase its margins, and profitability will also be better,” says Rishabh Bagaria, Analyst, Pinc Research. And while Khattar has given the company a new growth path, Suzuki’s Takanishi needs to radically change the way its management works, thinks and acts. Can he shift the company into the seventh gear?
we may consider more diesel models
B&E: Maruti is trying to enter higher segments lately. Will the company add more luxury models?
RCB: As the market grows and the purchasing power of the consumer rises, we have always added bigger cars to our portfolio. When we started out, we came with the 800, but as the market evolved we got the 1L 1000 and then we came with the 1.3L Esteem.
B&E: Is Maruti’s mass market image affecting its brand appeal?
RCB: Partly, but now since the SX4 has done so well, it is clear that the perception is changing. Now, higher segment consumers have started looking at Maruti as well.
B&E: But the Baleno was not so successful in the higher segment.
RCB: It will be wrong to term Baleno as unsuccessful. It was a well engineered, quality car. Though it may not have done volumes, it still has a number of satisfied customers, including me.
B&E: What is Maruti’s future strategy?
RCB: Maruti’s fundamental strategy revolves around small cars. However, it is still too early to comment further (read: until Tata Motors launched its Rs.1 lakh car).
B&E: The competition is playing a catch-up game. Is Maruti threatened? What’s your diesel strategy?
RCB: Barely, as we still hold the overall majority share in the four-wheeler sector. We have diesel models in our portfolio, like the one which comes with the Swift. Since we have our own manufacturing plant now, we may consider including more diesels.
Right now, Maruti seems to be into the same problem which Europe’s largest car maker, Volkswagen, got into, when it launched the Phoeton luxury sedan (based on the Audi A8). It was perceived to be a wrong move for a company that was synonymous with mass models like Golf and Jeta. In fact, Volkswagen literally translates into ‘the people’s car’ in German. Therefore, VW’s objective to establish itself as a company that was technologically capable of slugging it out in the luxury segment did not succeed. What it did was to retain several brand platforms – each catering to different consumer segments.
Explains Dhawan, “The problem which Maruti faces can be solved easily. It should have diversified brand platforms, which can be anonymous to Maruti Suzuki. It can be a strategy similar to the manner in which Toyota sells Lexus in developed markets, while being disassociated with the brand.”
But there’s an area where Maruti is miles ahead of competition – after-sales service. This may prove to be the deciding factor. Vaidya feels that “the transition from ‘products’ to ‘brands’ has been completed in India. “The intangible offerings have gained as much importance as tangible product features. Monitoring customer satisfaction periodically is also very critical. It should be ‘customer care’ rather than mere after-sales service. Raison-de-entrée of this function should be customer delight,” he wrote. Not surprising, therefore, that most analysts have a ‘buy’ on Maruti stock. “I think the prospective price hike and future product mix will increase its margins, and profitability will also be better,” says Rishabh Bagaria, Analyst, Pinc Research. And while Khattar has given the company a new growth path, Suzuki’s Takanishi needs to radically change the way its management works, thinks and acts. Can he shift the company into the seventh gear?
we may consider more diesel models
B&E: Maruti is trying to enter higher segments lately. Will the company add more luxury models?
RCB: As the market grows and the purchasing power of the consumer rises, we have always added bigger cars to our portfolio. When we started out, we came with the 800, but as the market evolved we got the 1L 1000 and then we came with the 1.3L Esteem.
B&E: Is Maruti’s mass market image affecting its brand appeal?
RCB: Partly, but now since the SX4 has done so well, it is clear that the perception is changing. Now, higher segment consumers have started looking at Maruti as well.
B&E: But the Baleno was not so successful in the higher segment.
RCB: It will be wrong to term Baleno as unsuccessful. It was a well engineered, quality car. Though it may not have done volumes, it still has a number of satisfied customers, including me.
B&E: What is Maruti’s future strategy?
RCB: Maruti’s fundamental strategy revolves around small cars. However, it is still too early to comment further (read: until Tata Motors launched its Rs.1 lakh car).
B&E: The competition is playing a catch-up game. Is Maruti threatened? What’s your diesel strategy?
RCB: Barely, as we still hold the overall majority share in the four-wheeler sector. We have diesel models in our portfolio, like the one which comes with the Swift. Since we have our own manufacturing plant now, we may consider including more diesels.
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