‘Aim To See India Among Top 3 Auto Markets’

Randhir Singh Kalsi, executive director, Sales & Marketing, Maruti Suzuki India tells Ashish Sinha that with the adoption of new technologies, cars will become expensive in coming years and how Maruti is gearing up for the challenge.

Edited excerpts.

What are the reasons for sluggish sales of Alto or WagonR in recent past? Will that be the trend going forward?
On the contrary, despite the increasing competition in the Indian car market, the Alto and the WagonR continue to hold their positions among the top 5 selling cars in India that has over 200 brands. According to data from the Society of Indian Automobile Manufacturers (SIAM), Maruti Suzuki India’s entry-level car Alto retained its numero uno position in April-October period this fiscal with over 139,000 units. WagonR moved up to the third spot during the period selling over 102,000 posting a growth of 2.69 per cent. With six of our models in Top 10 bestselling list, we have maintained our share of 47.2 per cent in the domestic passenger vehicles market.

Having said that, what you are referring is a capacity issue than a popularity issue. Our plants are running at peak capacities and we are making adjustments between models to meet the market demand.

What will be the importance of the small car segment, if any, for Maruti in the coming years?
India’s story is remarkable for its compact vehicles. These account for more than 70 per cent of a market that is inching close to 3 million units. The number of sub 4-metre models are increasing year on year — from 34 in FY12 to 47 models in FY16. In five years, the industry has added 13 new models. In addition, the new trend is how smartly one packs features in compact cars. Some recent examples where we have smartly added new technologies to our offerings include Auto Gear Shift Technology (which is a two pedal technology) on models like the Alto K-10 and WagonR. Importantly, customers in the entry segment are as aspirational in terms of design, technology, and features as customers of higher segment offerings. Therefore, OEMs have to read their expectations well before bringing a product. Entry segment customers gain a lot of confidence if the product or offering has shown good performance in 1-2 years of running.

Can the customers expect new launches/improved variants in the small car segment in 2017 or 2018?
Bringing new models and refreshments is an ongoing effort at MSIL. In fact Suzuki is committed to bring 20 new models by 2020 and at least 15 of them are expected in India. This is over and above the existing model refreshments and upgrades. We would be launching the Ignis and Baleno DITC shortly.

What steps are being taken to reduce the long waiting period for the Baleno and Vitara Brezza?
We are thankful to customers for their appreciation of and patronage to new models like the Ciaz, the Baleno and the Brezza. We are producing over 25 per cent more than the planned volumes. Our production teams are making several adjustments on the production lines to meet market demand.

What are the main reasons for the surge in sales of utility vehicles and compact SUV category?
The growing phenomenon of “compact SUV” in India marries customers’ desire for standout SUV design with the social objective of encouraging small cars. Besides innovations in design, compact vehicles in India now come fitted with the latest and the best in terms of features, safety and comfort, often at very competitive prices. Coming specifically to our product Brezza, its balance between style, sportiness and performance has struck a chord with the customers who have given it an overwhelming response. The Brezza sets Maruti Suzuki on a strong footing in the utility vehicle space. We are delighted at the customer response and are trying our best to optimise production to meet the high demand. In the B segment, the company has posted growth of over 130 per cent. Riding on the success of the Vitara Brezza, the Ertiga and the S Cross the volumes have grown from 46,000 units (Apr-Oct) FY 15-16 to 1,09,960 units in FY16-17.

Which three cars will get you volumes and drive profitability by 2020?
Profitability is a function of several factors such as forex, commodity prices, volumes and model mix. We can’t give guidance on that.

By 2020, what is the expected growth in contribution of Nexa to the overall business? What is the current contribution of Nexa to Maruti’s overall revenue?
NEXA, already contributes 10 per cent of the overall sales volume; we plan on taking that figure up to 15 per cent by 2020.

Between changes in fuel composition, new emission norms and greener options, which aspects will have greater impact on the business?
Worldwide when new norms come OEMs adopt new technologies, the cost of vehicles go up. This is expected in India too. Cars will become expensive. We want to see India as one of the top 3 global automobile markets. This will only happen if we create safe, efficient and environment-friendly vehicles. Our teams are on course to meet these norms.