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Business News/ Companies / News/  Lessons in size for Maruti Suzuki ahead of Ciaz launch
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Lessons in size for Maruti Suzuki ahead of Ciaz launch

The firm needs to break out of the small carmaker image as it prepares to sell its new sedan starting October

Bigger, sleeker and equipped with many more features than the SX4 sedan that it will replace, the Ciaz holds the key to Maruti Suzuki’s fortunes in the mid-sedan market. Premium
Bigger, sleeker and equipped with many more features than the SX4 sedan that it will replace, the Ciaz holds the key to Maruti Suzuki’s fortunes in the mid-sedan market.

New Delhi: Sales executives at Maruti Suzuki India Ltd, India’s top car maker, typically don’t need to spend more than an hour to convince a customer who is buying an entry-level small car—a segment in which the firm sells every second vehicle purchased in India.

“We tell an Alto customer to wait for half an hour and then we will give you a test drive," Mayank Pareek, chief operating officer (sales and marketing), said. More often than not, the customer ends up buying the Alto, an 800cc hatchback, which is one of the largest selling entry-level cars in India.

Maruti Suzuki, the Indian unit of Japan’s Suzuki Motor Corp., knows it won’t have that luxury when it launches the Ciaz in October in the mid-sedan market in which, Pareek said, Maruti will be a “challenger" and “not a leader".

“With Ciaz, we may have to take the car to a customer’s home and may have to pursue a customer for a week perhaps," he said.

Bigger, sleeker and equipped with many more features than the SX4 sedan that it will replace, the Ciaz holds the key to Maruti Suzuki’s fortunes in the mid-sedan market where it will compete with Honda City, Hyundai Verna and Volkswagen Vento. Ciaz is powered by a 1.3-litre diesel and a 1.4-litre petrol engine.

The SX4 did enjoy its share of success in the initial years after its launch in 2007, but its appeal faded before the power, features and looks of the City, Verna and Vento.

A successful Maruti car— the Alto, Swift, or DZire—sells in the range of 10,000-15,000 units per month even during a downturn. The SX4 sold 4,029 units in the year ended March, down 40% from the previous year. The City sold 35,844 units, up 17.4% from a year earlier. In the five months to August, sales of City grew 210% to 30,447 units.

Every time Maruti Suzuki has tried to look beyond its bread-and-butter small car segment, its image of a small car maker has dented prospects. Customer response to the Baleno, Kizashi and Grand Vitara was lukewarm at best. Sales of Kizashi, an executive sedan, were stopped within 18 months of its launch as customers preferred the Honda Accord and Toyota Camry in that segment.

One exception was the entry-level sedan Esteem, which sold 109,000 units in 13 years before being phased out in December 2007.

As a result, dealers and company associates are being cautious about the prospects of the Ciaz. “The problem is in the badge. In that segment, people relate more with Honda than any other brand and traditionally, Maruti is known to be a small car player," said a Maruti dealer, requesting anonymity.

Pareek said he has “a few tricks" rolled up his sleeve, but he isn’t saying what they are.

“I am not worried, but a little careful as in the small car segment, more or less, we know what to do, but this is one area in which, as a challenger, we have to do a lot of new things," he said in a phone interview. “We have identified the challenges. We are trying to change that and we will talk to you after one year."

The dealer cited above said the initial response to the Ciaz has been positive and he has received bookings in “higher double-digits" in less than a week since the firm started taking pre-launch orders on 4 September. However, he added that long waiting periods for a new car can drive away customers to other brands.

According to Pareek, the company received pre-launch bookings for as many as 3,500 units in the four days from 4 September.

The company isn’t leaving anything to chance.

On Monday, Maruti Suzuki began training staff at its dealers on the Ciaz. It has set up a training centre in every state and hired at least 1,800 dealership sales executives, some poached from rivals, specifically for the Ciaz, and is in the process of training 28,000 sales executives across the country.

According to Pareek, sales staff are being trained to understand that customers in the mid-sedan segment are different from those for small cars.

“You can’t treat customers in this segment the way you do a traditional small car buyer," he said.

The company has hired Bollywood actor Ranveer Singh to promote the car, but the move could go either way. Its last attempt at using celebrities—the father-son actor duo of Amitabh Bachchan and Abhishek Bachchan for multi-utility vehicle Versa—was a failure.

Kiran Khalap, co-founder of Mumbai-based brand consultancy Chlorophyll, doubts if a consumer really differentiates between celebrity and non-celebrity brand promotions.

“Any intelligent person will quickly draw the conclusion that, by itself, a celebrity endorsement cannot guarantee either communication memorability or a shift in brand associations," he said.

Khalap said the Ciaz appears to be anchored correctly to the rising level of aspiration in the mainstream market.

Suneera Tandon contributed to this story.

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Published: 16 Sep 2014, 07:57 PM IST
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