Why ‘big’ Maruti need not worry about small Renault Kwid - Hindustan Times
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Why ‘big’ Maruti need not worry about small Renault Kwid

Hindustan Times | By, New Delhi
Sep 09, 2016 03:33 PM IST

Maruti still seems to be caught in the old mindset. I do get to talk to a lot of people in Maruti and some of them sound almost apologetic about the lack of mongrel in the S-Cross, which the Creta and Brezza are seen to have in abundance. They should shout from the rooftops that the S-Cross is a thoroughbred.

In an interview to Mint newspaper a few days ago, Maruti Suzuki’s CEO, Kenichi Ayukawa, was full of praise for Renault’s Kwid. “It is a very interesting model. We’ve to figure out what makes customers accept it and use that in the development of our products,” he said of the car that’s challenging Maruti’s hegemony at the entry-level of the market. “Design-wise, they have opted for an SUV-like vehicle. That is better than ours.”

Managing Director and CEO Maruti Suzuki India Limited, Kenichi Ayukawa.(Hindustan Times)
Managing Director and CEO Maruti Suzuki India Limited, Kenichi Ayukawa.(Hindustan Times)

Now Ayukawa-san is a remarkable man. When he came to know about a fire at a factory that made air-conditioners for Maruti on a Sunday afternoon, he was at the burning factory before the fire had been put out, and stationed himself there to help with controlling the damage and re-starting the factory.

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He is an even more remarkable CEO. A string of Maruti CEOs were dogged by a most in convenient question: will Maruti ever be able to convince enough people to buy its bigger, pricier cars? Automotive journalists asked them that question everywhere they went: every launch, every press conference. The answers were mostly polite murmurs of intent and hope.

That question never made sense. No one dogged Hero Honda or its later avatar, Hero MotoCorp, if it will ever break out of its core segment of small motorcycles and challenge Harley Davidson. Why, no one asked Harley if it will ever make small motorcycles to challenge Hero.

A company’s religion is to grow its business, make profits (though profits sometimes need to be sacrificed to grow the business), work to the benefit of its shareholders, and be a good corporate citizen. How it does those things is its own business.If Maruti could do all those things well — which it did — while dominating the small car market without making a single big car, only its shareholders had the right to ask if it would continue to do that profitably in the future or whether it would like to look outside its comfort zone.

But Ayukawa has answered those questions. He took charge of the company under the most inauspicious of circumstances, eight months and 13 days after rampaging workers at Maruti’s Manesar factory broke the legs of a manager and left him to die in a burning room. From there, Ayukawa rebuilt relations with the workers and converted Maruti into a maker of bigger, pricier cars, and — just as important — cars of desire.

The Ciaz sells more than any other mid-size sedan; it outsold Honda City and Hyundai Verna in April-July. The Vitara Brezza has opened up the utility segment for Maruti, outselling Hyundai’s Creta.

It has to be added that Creta costs much more, so Brezza will appeal to a larger market. But it is clear that a lot more people are now willing to pay a lot more for Maruti’s cars, and there is no greater evidence of that than two babies in Nexa, the new line of Maruti’s showrooms.

Both are unique. The Baleno, in the normal course, which means under the old Maruti, would have been made and sold very differently. But today’s Maruti sells it as a car to which one can aspire. The Baleno does not look for approval in the bashful manner of the old Maruti; modern and stylish, it demands attention.

The other car in Nexa, S-Cross, is the boldest, best-engineered, most-equipped, and most-capable car Maruti has ever made. Its 1.6 variant has a powerful and refined engine that is sourced from Fiat, but even Fiat does not have it on any of its cars in India. Its understated design and build match the Europeans. No wonder it sells 2,500 or more in most months — more than the total sales of some companies.

But this is where Maruti still seems to be caught in the old mindset. I do get to talk to a lot of people in Maruti and some of them sound almost apologetic about the lack of mongrel in the S-Cross, which the Creta and Brezza are seen to have in abundance. They should shout from the rooftops that the S-Cross is a thoroughbred.

Maruti needs to find its inner mongrel in the sense the Australians use the word: toughness and aggression. When Hyundai embraced a new design philosophy, it told the world it had gone “fluidic”. But not many people consciously think of Maruti’s new design philosophy, because the company does not talk much about it even though it has been in place since the Swift.

But the mongrel will remain carefully locked up inside if Ayukawa-san keeps admiring the small cars made by other companies.He should leave his rivals to their own devices. Look at them, fight them, but do not lose sight of the other fight you have picked: in bigger and pricier segments.

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  • ABOUT THE AUTHOR
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    Suveen Sinha was part of Hindustan Times’ nationwide network of correspondents that brings news, analysis and information to its readers. He no longer works with the Hindustan Times.

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