Maruti Suzuki India Ltd (MSIL), the leader in the world’s second-fastest growing automobile market, is not resting on its laurels. It wants to double its dealer network to 2,000 outlets across 800 cities by 2015, and wants to be present in all places with a population in excess of 50,000.The company also plans to ramp up its dealer sales force from 20,000 to 50,000.
At present, the firm has 970 outlets covering 643 cities — almost three times that of second-placed Hyundai’s 340 dealers in 224 cities. But it is not taking things easy, having learned its lesson the hard way in 2010, when its marketshare dipped below 50% for the first time. The company had then admitted it failed to anticipate the market’s growth potential.
“To sustain our growth in the domestic market, we have to move faster and penetrate deeper,” said Mayank Pareek, managing executive officer (marketing and sales), MSIL. “With improvement in road infrastructure, tier-II and tier-III cities are now well connected. Though we are already well represented in most parts, we want to strengthen this further in line with our projections of growth.”
Industry experts believe the Indian car market will double to 3 million by 2015. Maruti thinks it may reach a level of 4.5-4.6 million passenger vehicles by that time. Already, the domestic industry has grown by an average 13% over the last 5 years making it the fastest growing after China. So far this fiscal, car sales have surged by over 30% (April-Jan 2010-11), and even though a moderation is expected in 2012-13, the growth story is bound to stay.
“There are enough indications of a moderation as conversions (of enquiries into actual sales) at our dealerships have dipped,” Pareek said. “But if one looks at the low levels of penetration of cars in India, the overall growth potential is still very big.”
The dealer network augmentation is in tandem with Maruti’s expansion in its factories which would see its capacity go up from 1.2 million today to 1.7 million by 2013.
With only 11 cars per 1,000 people, India has one of the lowest levels of automobile ownership, but is projected to emerge the fourth-largest car market in the world by 2015, vaulting over all European nations.