Maruti Suzuki has been the leader in the small car segment for decades now. However, in light of the rising competition, how are you planning to protect your market share? How critical is the 50% mark for you?
When many new players entered the Indian market in the mid-90s with the belief that the Indian consumer will gradually move towards bigger cars and launched sedans, we continued to invest in the small car segment. And the result is evident from the strong position that we hold in this segment. Today, the small car segment accounts for around 55-60% of the Indian automotive market and we believe that it will continue to hold a huge chunk till 2015-16 even after the industry will double up in terms of overall volumes. As far as our plans are concerned, we will continue to invest in this segment as we have been doing so far. Even after the competition started to increase in this segment with the launch of products like Santro and Matiz, it helped the overall volumes but we were able to hold a strong position in this segment and we have maintained it till date. In many major markets, the leader holds on an average a market share of 20-25% and the strong position of Maruti Suzuki in India is a result of our constant efforts to drive the growth of the industry. The 50% market share is important to keep the team on its toes and being able to sell half of the overall volumes surely gives a sense of pride to the employees. But from a company standpoint, it isn’t very important.
The small car segment is different in many ways today as compared to what it used to be in the 1990s. How have you adapted with the times and do you believe that it has delivered the desired results?
The biggest difference today is the number of choices that the consumers have. From the days when there were just a handful of options, there are more than 12 cars available in the premium hatchback segment alone to choose from. In short, the small car market is fragmented and there is a different car available for a different set of consumer. For instance, even after the success of Swift, we launched the Ritz, which is more of a family car and the TG is different as compared to the Swift buyer. While there were many doubts that were raised at the time of the launch, the fact is that Ritz grew at a faster pace compared to Swift in terms of overall volumes. In our portfolio, A-Star is for the young modern consumer but Alto is a car for consumers who are looking at value and fuel efficiency. Alto K10 is for a set of consumers who demand style apart from fuel efficiency in the product and the list goes on.
Apart from launching new products in the small car segment, what are your plans to stay ahead of the competition in the coming times?
Product is definitely going to be a major factor along with the brand. Maruti Suzuki has been a brand known for providing unmatched value. We will continue to invest in our brand. Over the past few years, apart from developing product-centric campaigns, we have also come up with campaigns for the brand, like the K-Series engine. One should not forget that apart from the price-point of the product, the ownership cost of the product also makes a lot of difference. We will be coming up with a brand campaign shortly that will talk about our wide service and sales network and we believe that these efforts will help us maintain our share amidst rising competition. We have been listening very carefully to our consumer and are always ready to tweak things accordingly.
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Source : IIPM Editorial, 2011.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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