Maruti is not just showing cars at Auto Expo, it’s making a statement
With due respect to the old, much larger Grand Vitara, which was fully imported and not meant to garner high volumes, the Brezza is Maruti’s first real shot at the SUV market, though of the smaller kind.Delhi Auto Expo 2016 Updated: Feb 03, 2016 17:09 IST
There are two ways to look at the Vitara Brezza, unveiled by Maruti Suzuki at the Auto Expo on Wednesday. The first is to give it fleeting attention as yet another car in a crowded market. The other is to treat it as a ploy by Maruti to conquer its old bugbears of technology and safety, while increasing its lead over rivals.
Four years ago, Maruti was staring down the two barrels of an agitating workforce and falling profits. What would have hurt as much is that its share of the passenger car market fell below 40% for the first time in living memory, from a vertigo defying 55.5% in 2000.
That was when the company got down to finding God in the details. It waded into small towns and villages to find buyers who till then had not realised they needed a car. It found people whose income was not affected by how the economy was doing, and some whose income increased if things were going wrong for others. Temple priests, for instance, earned more as other people despaired. School teachers, village traders, granite polishers, dhaba owners, farmers – people most other car companies did not think much of -- did their bit to keep Maruti’s sales growing. Not too fast, but fast enough.
The rest was done by the slowdown in the industry. Therefore, as Maruti’s sales rose 16% in the three years between 2011-12 and 2014-15, its share of the market rose much more impressively, from 38% to 45%, as most of the others lost ground. In the nine months from April to December last year, this figure rose further to 47%.
This is a happy oddity for Maruti. The market leaders in other countries make do with much less: 30% in Japan, 22% in Germany, 16% in Brazil, 13% in China, and 12% in the United States. Four out of the top five selling cars in India, new and old put together, are Maruti’s. And it no longer has to keep talking about the small towns and villages; its market share in the top 10 cities has grown steadily.
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Refusing to rest on its oars, it is using this purple patch to address some old issues. The Nexa line of showrooms, for example, is a unique experiment, which seemed costly as the first entrant in the shiny new dealerships, the S-Cross, did not really set the roads on fire. But the next, the Baleno, though it carries the name of a failed sedan, has not only overtaken the segment leader, Hyundai’s i20, but also its own best selling sibling, the Swift.
The Baleno’s success has done much more: it has given Maruti hope that it can make people pay a premium for its cars, instead of selling them on the old plank of value for money.
That is where the Brezza comes in. With due respect to the old, much larger Grand Vitara, which was fully imported and not meant to garner high volumes, the Brezza is Maruti’s first real shot at the SUV market, though of the smaller kind. This market was first created by Renault’s Duster and of late charmed by Hyundai’s Creta. People mistook the S-Cross as a player of this game, with no pretty outcome for the crossover.
The lightly built crossover IGNIS, expected around Diwali, and the Baleno RS, a high-performance variant, may help confirm that belief further.
Just like human beings, a company needs self belief. That the crash tests of the Brezza were done at Maruti’s new R&D facility at Rohtak will give it some more of that. It occupies 700 acres, more than the company’s old factory at Gurgaon (300 acres) and the new one at Manesar (600 acres). T Suzuki, the Japanese parent’s COO, earlier told HT that Maruti already contributes much to the development of new models.
Enough, perhaps, for the Maruti brass to make a presentation in New Delhi to say how they are setting the trend in technology. They are not wrong, the current fad of automatic transmission (it does not require you to shift gears) owes much to Maruti. The company has in fact three types of this transmission out in the market: the auto gear shift (the poor man’s automatic, fitted in the Celerio, Alto K10, Wagon R, and DZire), automatic transmission (Ciaz, DZire, Ertiga, Ritz), and the sophisticated continuous variable transmission, which the Baleno has.
In the old days, the company’s press conferences will have predictable evasiveness whenever questions of safety were raised. It now makes loud boasts about safety features, and about providing airbags and ABS even in its small cars if the buyer is willing to pay a little extra.
But the most striking thing in that presentation was the slide about the network. Maruti enjoys a distinct advantage in the buyer’s mind because its network of dealers and service centres is much larger than anyone else’s. There was an unforgettable television commercial about two young men in a Gypsy not finding food and water in Ladakh but funding a Maruti service station. By the year 2020, the company plans increase it sharply to 4,000 sales outlets and 5,000 workshops.
The title of the presentation was transformation. It’s an ugly word, but, in this context, not meaningless.