Kenichi Ayukawa, managing director and CEO of Maruti Suzuki India, says he’s aiming for the top spot in the SUV market with the just launched Vitara Brezza. Excerpts from an interview:
The Gypsy was one of the first few SUVs around in India. But historically, it’s been difficult for Maruti to crack the SUV segment. Do you think it was really a lack of products or was it the perception of the brand?
We have to apologise to our customers for making them wait for a long time. We are confident that the Vitara Brezza will be well received by our customers.
What are your expectations of the Brezza and who is the target customer?
Our target is mainly the young family who we expect to enjoy driving and life. Also those who want an urban cruiser and want to enjoy driving in the city.
Since the Vitara Brezza will be sold from the regular Maruti Suzuki network, do you expect it to be a large volume car?
As you say, we are a little bit behind in the SUV segment. But as far as the Vitara Brezza is concerned, we want to be at the No. 1 position in the segment. That is why we are supplying this model through our existing network.
The perception of the Nexa network is that it retails the more expensive cars. What, according to you, is the positioning of cars in Nexa and non-Nexa channels?
When we opened the Nexa channel, we presented a new experience to customers. It involves different colours and different products compared to the existing network. That is why we have to present a new type of vehicle, which is different from the existing channel product, to try and catch the new customer.
Does this mean that the more premium products are sold from Nexa and the mass products from the regular network?
Premium itself is a very difficult definition. Of course, some people feel that Nexa is premium and that’s good in a sense. I take it as some differentiation from the existing channel but that’s still something we’re looking for in the future.
So Maruti itself is still defining the Nexa positioning?
Maruti Suzuki has just under 50% share of the India market and you have recently sold the three millionth Alto. Do you feel that this volume is a deterrent as far as premium positioning goes? People don’t view Maruti as a premium brand, which is where it has inherently struggled?
I think that’s because at the beginning, our company stood for a people’s car. That’s the core business line for us. Also after 30 years, people’s demands are changing. In order to catch up with customer demand, we have to align the products to them. While we have to align some premium models, we aren’t targeting luxury cars.
The Union Budget has imposed new taxes on the auto industry. Does this make things difficult for manufacturers and do you feel diesel vehicles are being treated unfairly?
Nobody’s happy to pay a new tax. But the government is firm about it and we have to follow it. As regards the diesel issue, it is the customer who prefers a particular type of vehicle. That’s the key point. We will continue doing business, whether diesel or petrol, depending on market demand.
Isn’t this instability in policy difficult for manufacturers?
Yes. As an industry, you are looking at a long-term investment and a sudden change in policy direction will definitely impact industry.
BS VI emission norms are to come into effect in 2020. Is Maruti ready for that, or do you think it is too early?
The target itself is not easy but the automotive industry has the responsibility to tackle the pollution issue. We have to recognise that and solve the problem. We need time and have to carefully make the changes, or else we will have to make big investments which may also impact costs. One thing we need to consider is that we have to communicate with the government.
It is understood that BS VI will go across the metro cities first. Isn’t that a tricky situation for Maruti since it is spread across the country?
Practically, it is not feasible because a car is a moving space, not only in the city but also in rural areas. If people aren’t aware of the changes nationwide, it is a very difficult condition.
New and upcoming safety, crash test and emission level norms will affect pricing. What is your point of view?
Safety is a very important factor and we are already focusing on that. All our cars have optional safety equipment and, gradually, we need to change that. The issue of increased safety is not only about the product and the buyer. People have to follow traffic rules and avoid committing road accidents.
Maruti has managed to hold onto its market share through all the tough times, and even increase it. What is your magic formula?
You need to make efforts every day. We want to be with the customer at all times. ‘Customer’ is the key word for us and how we can keep the customer satisfied. That’s why Maruti is successful in the market.
(in partnership with Autocar India)