[Carophilic]

This is indeed a welcome step. In a country like India where people correlate the length of the car to the engine size, it is important to garner every edge that a maker can in order to feel premium to the prospective buyer. Hyundai did not do better only because of their products but also because of a massive re branding exercise that took place worldwide and is well documented. Fancy terms like fluidic etc. were coined and lapped up by common folk.
For a maker like Maruti, it is necessary to remodel themselves in every way carefully so as to not become clones of existing celebrity makers like VW or Ford etc.

[S_U_N]

Some of the above posts are about dealership experience.
While Maruti is laughing away to the bank with loads of cash each year, are the dealerships really making a lot of money?
Maruti is quite strict when it comes to discounts, so the dealership margin is quite fixed (and not fat). The only way they can grow is by selling more volumes. This comes back to the dealership and how much they are prepared to invest for this.
Question: how much of influencing can Maruti do for that?

I don't think Maruti is planning to include the premium section at all dealerships. This could be only at some really big ones in each city.

[rohanjf]

It's a relief that Maruti isn't going to rebrand themselves as premium car manufacturers, but are only offering certain models as premium products with premium dealership and service experience.

All this while I was wondering who will cater the lower segments if Maruti itself exits these segments. As is, all global cheap/inexpensive/budget car manufacturers are positioning themselves as premium manufacturers here (Toyota, Honda, Volkswagen, Nissan etc)! I am glad that this won't happen with Maruti.

Then the bigger question: will Maruti really offer all the safety features in their premium/global models that they offer in other countries? They should, because the premium models will be priced about the same all over the world. But I somehow feel that they won't, because for India, it is enough if the car looks and feels premium. What is hidden need not be premium (I can think only of safety features, as you can't really see ESP sensors or ABS modules when you inspect the car in showroom).

[mpksuhas]

It is good to see Maruti not sitting on laurels of being market leader and trying to improve / retain the position.

However, I don't think image facelift is the only solution. Most of the issues which Maruti faces is due to lack of options in non entry level segment.

For a customer looking to upgrade from a ~ 6 lac segment Maruti's options are limited to Ciaz. Do remember, couple of months back it would have been Sx4 which was running long in its tooth.

The reason I mentioned sub 6 lac category is that for many first time urban car buyers that now is the entry level. Compared to ~ 3 lac (M800, Alto) many years earlier.

Now, this lack of options is not just limited to Maruti, infact ~ 11 Lac range most of the brands has model scarcity. Hyundai has only Verna, VW has only Vento, Toyota has only Etios (though priced bit less). Renault & Nissan combine has their Duster / Terrno & Scala / Sunny combo though, same with Ford with Ecosport & Fiesta.

Now, in this scenario. Maruti does not have any aspirational model in that range. All models which tasted success has that (City, Ecosport, Duster, Verna). This is not solely because of dealer experience. If that was the case Fiesta would have sold the same as Ecosport.

[romeomidhun]

Before Maruti tries to build up a better image, they have to shelve the plan to introduce the mini truck Y9T to not dilute the current image of passenger car manufacturer! Then they can try all the above steps to build up a better image.

IMO, they can use the name "Maruti" for cars upto WR / Celerio and use the name "Suzuki" for cars starting from Ritz / Swift.

[cpbopanna]

Maruti & Volkswagen are as different as chalk and cheese.

Maruti's forte is cheap, reliability & fuel-efficiency; they should stick to that!

VW will continue with performance and safety.

No point trying to get into the other's shoes!

[TSIched'Out]

I think Maruti should continue de-engineering Suzuki Cars and maintain its leadership position by building unsafe but reliable rattle-houses than dreaming about re-positioning itself into a premium brand. For that to happen, not only the entire corporate DNA has to change but it will also involve significant effort at the sales channel which is not entirely in MSIL hands. Dealers are paid very low commission on car sales and only thing which is keeping them with MSIL is manufacturer stipulated frequent (but unnecessary) service visits and corresponding ASS margins.

In order to go premium, MSIL should:
1. Launch Suzuki as a separate brand with separate dealership network. Cars from Ciaz and above (plus maybe upcoming new segment launches like compact SUV) can be sold with assurance that they are having same material (read sheet metal thickness, safety features) and workmanship quality as sold in developed markets

2. Continue selling Dzire and below with Maruti brand through the existing sales channel. All so called facelifts/new versions can continue under Maruti brand.

3. Ask Mr. Bhargava to stop putting his foot in his mouth from time to time.

P.S.: With no offence to MSIL owners. I'm sure they knew very well what they are buying.

[1lokesh]

Originally Posted by GTO

Hyundai didn't do anything magical to its image, neither did Mahindra. Yet, both these manufacturers saw success (Elantra, XUV500 etc.) in the 15 lakh segment, on the strength of the product alone.

Mahindra did this -->

https://www.youtube.com/watch?v=Ez2IbQULlzk

and IMHO, this campaign helped them a lot to get the right attention and audience

Originally Posted by GTO

Maruti's strategists must be smoking some pretty heavy stuff

[blueeyed]

In my opinion 'Maruti' can never be a premium manufacturer, but they can make 'Suzuki' a premium brand.

Alto is the first choice of most of the first-time car buyers. Is this only due to the USP's of the car or it being the best budget car out in the market? I think no. Most of its sale occurs due to the brand name 'Maruti' and by buying a 'maruti car' the owner expects the car to be cheap,easy(on wallet) to maintain, and reliable.

Yes, they can make their bigger cars premium but it should be under another brand(probably 'Suzuki'). But still Indians will doubt how premium a Maruti( or Suzuki) can be.

[AshBabu]

At lower segment whatever product Maruti launch, it seems to succeed. But premium segment leadership is elusive until now.

I appreciate their intention and steps for image makeover. But instead of limiting themselves to premium customers, their aim should be to enrich sales and service experience of all customers. If they can achieve it, then that will be their USP.

Also they need to re-look their product design strategy. As rightly mentioned by GTO, Hyundai and Mahindra succeeded in premium segment because of their product. Design uniqueness, segment leading feature list and competitive pricing played larger part

In my opinion Maruti is bogged down by two thoughts

• Please all design
  
• Mileage

Take the case of Ciaz, at concept stage it looked amazing, but actual product was bland. They need one successful product to establish them in premium segment. For that they need to think out of box and provide a head turning design and product.

[Vigkey]

I feel this is a move in the right direction. At least they are trying to come out of their comfort zone and not resting on their laurels.

However, to make this really successfully, they will have to bring in more products. Ciaz, SX4 S-Cross and probably their new premium hatchback is not going to do the trick. They also need to make sure the quality is not compromised as well. Currently none of the Maruti products are known for its build quality or plastic quality. If that is not there no special treatment will satisfy the premium customers.

The problem with Suzuki is that it is not considered as a premium brand anywhere in the world (Not sure of Europe. Probably Japan is a good market). It has such a huge market only in India. In US the market Suzuki has close to nil market share. The 1.5 yrs I was there, I have probably seen as many Suzuki cars. I guess there is something inherently wrong with Suzuki's image across the globe. To start with India, its bread and butter market will be a good idea.

[romeomidhun]

Originally Posted by romeomidhun

Before Maruti tries to build up a better image, they have to shelve the plan to introduce the mini truck Y9T to not dilute the current image of passenger car manufacturer!

Just to add: IMO, Tata lost its market share in India after they came up with the "cheap" tagged Nano. Same is going to happen with Maruti. If their current image of "mini passenger car maker" makes way for the "mini lorry maker", it will be a disaster for the brand and its sales. They may be able to garner some sales from the "mini lorry" market, but will lose significant sales from its passenger car segment.

[vinya_jag]

I thought long and hard about it, and after going through all the above posts, here are some of my thoughts

Why would Maruti want to do that?
- They are only going to lose market share from here on.
Strangely, it never happened all this while. The Maruti-800/ Omni, and then the Alto/Zen/ Wagon-R, and now the new dzire/ Alto / Swift/ Celerio.
They never went down on the sales scale. The Indian Automotive Industry was ever growing, and accommodating newer players with ease. Even though Maruti lost a bit of its share, never fell back in meeting its targets.

Today, its a little different. New government, safety norms, changing emission norms are giving the European manufacturers, a bigger edge.
The day when Airbags and ABS are done mandatory, Omni and to an extent the Alto will be history. How long can the Tatas and Marutis play the price game and lobby the government?

- They have no presence in the upper segment because of their brand image
As discussed earlier, they have nothing to show, at the higher end. They have never done that before. Also their parent Suzuki is not known to have succeeded in this segment.

- They have no innovative products in their pipe line
There is no single USP that the Maruti products have, other than their price point. Partly because of their products suiting so well to the Indian spec, and the rest trying to catch up. And their hot seller Swift was basically a Mini.

How should they be doing that?
- Change the approach from top down
Management change? I would prefer that. You have to do business differently. Also, mass products do not build image. From the day the idea is conceived, the approach should be towards building a great product, and not to squeeze money from it

- This will not be done in a year or a couple of years
Ford, in the recent history was something that came close to pulling off a miracle in changing its image. There are not many examples other that that, which I can think of. So, with such low chances of succeeding, it probably would take a decade for Maruti to shed their image.

- They might have to lose out of some of its current sales
Bringing better cars, probably would mean, increased price, and maybe the competition would try and capitalise on this. Meaning, lower sales on some of their alreay existing portfolio.

- They probably also have to come out of the ultra-mass market
Having driven the Alto, will I buy the Kizashi? Maybe not. I would probably go for the C-class as the cheapest the Merc has to offer, is still the A-class

[kothamasi]

If maruti has separate show-rooms for the premium and the "cheap cars", even their bread and butter cars will not find buyers. Indian car owners are Image conscience and would not like to be seen in a car branded as "cheap". This will be good news for rivals Hyundai and Tata. The reason Maruti fails in the premium segment is because they have never tried to sell "hot/stylish" cars, for instance if they had also included (even higher priced) cabriolet and sport versions of the Swift or the A-star in their showrooms, it would have added to brand image and there would have also been enthusiasts who would have bought them. In my opinion, the Jimny has a good market potential in India but for reasons best known to MUL, they are just not bringing it India.

[tifosiboy]

Originally Posted by GTO

Hahaha, such kind of articles always have me

Classic case of pain being on the left hand and balm being applied to the right hand.

Maruti's bigger sedan (i.e. SX4) and 10+ lakh products failed NOT because of image, but because of product. Facts:

1. The SX4 was actually a good seller in the initial years. It was launched against the 2nd-generation Honda City (dolphin shape). Eventually however, the SX4's sales slowly declined, and it became a flop. Why? The product got too old! In the time that Maruti sold the SX4, Honda brought out two new generations of the City, VAG got the Vento / Rapid & Hyundai its successful Verna. The SX4 diesel also came much too late. And, by current standards, the interior quality is too cheap. Even the less expensive Dzire has better interiors than the SX4.

2. Maruti's premium products were destined to fail. The Kizashi was overpriced by 5 lakhs and didn't have a diesel option, while the Grand Vitara saw consistent price hikes and didn't have a diesel either. The Grand Vitara today is a 10 year old design! Who on earth buys a 10 year old overpriced product today? You're right....no one!

Hyundai didn't do anything magical to its image, neither did Mahindra. Yet, both these manufacturers saw success (Elantra, XUV500 etc.) in the 15 lakh segment, on the strength of the product alone.

Maruti's strategists must be smoking some pretty heavy stuff if they think image or fancy sales talk will sell their expensive cars. Ever bought an XUV500 lately? In fact, Audi showrooms are notorious for offering the worst sales experience, yet their cars sell. It's the product, stupid. And the product strategy is what you got all wrong (SX4 & up).



Call one section 'ELITE' means the other becomes 'CHEAP'. Not a good strategy. You don't discriminate between customers in the same showroom.



Lexus' success formula lies in opening separate showrooms altogether, not separating customers in the same showroom.

Fully agree with you GTO. Going upmarket or premium has to be supported by quality products. Fact is that Maruti has a serious problem in that Suzuki is virtually an insignificant auto maker globally with a very small product range. There is no way they can compete with the likes of Honda, VW, Hyundai and Toyota. They have a stranglehold on the hatchback market in India but I dont see them making a dent in the premium segment unless they dramatically improve product development and quality. I really don't see that happening in the short term. If you look at Suzuki products globally none of them sell in large enough numbers to be taken seriously (outside of Japan and perhaps Indonesia)