Looking To Disrupt India's LCV Market: Maruti Suzuki
What is your sales target for this financial year? Are you confident of cornering a 50% marketshare by the end of FY18?
We are talking about a double digit growth and are on track for that. So far (until August end) we have registered an 18% growth during this financial year. But there could be some sort of variations between H1 and H2 of this financial year. The absolute numbers in H2 are higher and the pace of growth is relatively low. This cannot be extrapolated. But we are confident of posting a double-digit growth (for FY 2017-18). The market share is again not in our hand but is governed by certain market forces. It depends on not only how we are performing, but also on how others are doing. Nobody, including us, can forecast its market share
As there is a lot of thrust on electric vehicles by the government, will you still sell hybrid vehicles?
As far as we are concerned, we are continuously focusing on hybrid vehicles. We were the first ones to bring in this path breaking initiative (of Smart Hybrids). We will continue to focus on hybrid vehicles as it is a perfect (intermediary) step towards zero-emission mobility.
You have recently announced plans to revamp your entire dealership network. Have you set a timeline for that?
We use various formats at our dealerships such as full-fledged showrooms, emerging market outlets and rural outlets. We will be also setting up 80 new outlets during this financial year. Our priority would be to initially focus on metros and mini-metros. Thereafter, we will go to smaller towns for this (dealership) renovation exercise.
There is a lot of buzz on Maruti Suzuki coming up with a 660cc Alto. Would be setting up compact outlets in tier-2 and tier-3 markets to cater to compact cars on a standalone basis?
As a company policy, we don’t talk about our future product plans. And there is nothing called ‘Compact Maruti Suzuki’ sales outlets that we have deliberated upon. As I just mentioned, we have three formats of distribution and will stick to that. These models are in place for the last six to seven years and we are fine with that.
Going forward, will you be focusing more on the sedan or the utility vehicle segment or would it be small car segment which we are known for?
You cannot focus on a particular segment considering the diversity of our country. One of our senses has been that we are looking at each and every segment as customers have varied tastes and preferences. While the Wagon R may be one of the most preferred cars in some areas, Swift could be the most preferred car in another area. While some customers may focus on the utility aspect, others may dwell on the cosmetics. We have to cater to all these segments. So we are helping our customers to upgrade themselves (to bigger cars), exercise a wider choice, etc. As customer expectations are going up, we are making our products more feature-rich (even) in the entry-level segment. Even a two-pedal technology and an entertainment system are provided in the Alto. As we move upwards, we intend to offer a vehicle to the customers at every price point. We are also aware of the fact that certain premiumization in the marketplace is happening and we are planning to cater to that segment as well. The bottom line is that if we are focusing on one segment, we do not reduce our focus on other segments. So we are fully focused on the entire spectrum of products that we are making.
Maruti Suzuki forayed into the LCV space by rolling out Super Carry around a year back. What has been the response to that product and how many units have you sold till date?
We did a pilot project on this last year as it was a new area we were venturing into. Selling a commercial vehicle is different from selling a car. A car is often associated with aspects like comfort, luxury, lifestyle, etc. The commercial vehicle, on the other hand, is like selling a livelihood to the customers. When we are talking about livelihood, we need to have a different approach altogether. We are now expanding countrywide and have already opened 100+ outlets. Seeing the exceptional response from select buyers, we are confident of disrupting the light truck market in the country with our next generation products just like we did with premium sedans (Ciaz) and SUVs (Vitara Brezza). The numbers (of LCVs) sold till now will not mean anything because we were at a pilot stage so far. Once we attain a critical mass, we may focus on numbers. Moving forward, I think next year would be the right time to talk about the numbers sold.
Do you have a dedicated sales vertical for taxi aggregators like Ola, Uber etc?
We always had a vertical for our institutional sales and this is an essential part of that. As far as numbers are concerned, we are selling anywhere between 7,000-8,000 units per month in the taxi segment. One thing I can say is that our cars are very popular among the users in the taxi segment primarily because of good performance, design and comfort. As the downtime is very important in such segments, we have a big advantage because of our vast service network. Moreover, low cost of ownership certainly benefits the drivers in that segment.
As the pay commission is recently revised, will the government employees be the next growth frontiers for you?
We are always a part and parcel of their buying pattern. For the period Apr-July we have posted a growth of about 50% over the previous year with over 100,000 units in this segment. Our cars are very popular amongst them. Our low maintenance cost, vast service network, performance, etc, helps them (by buying our products). Since they (govt employees) get arrears which mature over a certain period of time, their decisions are gradual (of buying a car). But certainly, with more disposable income with them, we hope that they will be planning to buy our products.
