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Business News/ Companies / News/  Maruti Suzuki putting money on Nexa to tap premium buyers
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Maruti Suzuki putting money on Nexa to tap premium buyers

The car maker's upcoming crossover S-Cross will be sold through Nexa, a new sales network to attract customers upgrading to other brands

The Maruti Suzuki S-Cross will compete with Renault Duster, Ford EcoSport and Hyundai’s upcoming Creta SUV. Photo: Abhijit Bhatlekar/MintPremium
The Maruti Suzuki S-Cross will compete with Renault Duster, Ford EcoSport and Hyundai’s upcoming Creta SUV. Photo: Abhijit Bhatlekar/Mint

Nashik/New Delhi: Sometime in October 2012, the management of India’s largest car maker, Maruti Suzuki India Ltd, sat down to devise a strategy to tap customers who were graduating to Japanese or European car brands after driving a Maruti for a long time.

The result was a conscious effort to tap customers upgrading from Maruti to other brands.

The idea was driven by its goal to sell two million cars annually.

In its previous attempts, Maruti had failed miserably.

Its sports utility vehicle (SUV) Grand Vitara and the premium sedan Kizashi bombed due to the lack of a diesel engine and Maruti’s inexperience in selling cars in those segments. Maruti stopped imports of Kizashi in November and offered discounts up to 5 lakh to clear the stock.

That was when the management decided to create Nexa—a separate sales network that will position Maruti cars as premium offerings in the market.

“We have realized that the expectation in the segment is completely different. We need to pamper the customers in the segment," said R.S. Kalsi, executive director (marketing and sales), Maruti Suzuki in Nashik on Friday after unveiling the company’s new product S-Cross, a crossover that the company is trying to position as its premium offering in India.

On 11 May, Mint first reported Maruti’s decision to sell its cars through two separate marketing networks, for which it has also revamped its top management.

The decision is prompted by the consumers choosing other brands over Maruti when buying bigger cars, as India’s largest car maker has been traditionally associated with small cars since introducing Maruti 800 in 1983.

Maruti needs to improve its market share in the premium car category to retain its dominance in the Indian market, where sales of sedans and SUVs have grown in step with prosperity and rising aspirations.

Nexa is one such big step in that direction.

“We have a strong base of 15 million customers; we wanted to offer them a different experience if they look to graduate from Maruti cars," said Kalsi.

Will Maruti make a car that could be priced 30 lakh to 35 lakh? The logical answer: no.

But Kalsi didn’t rule that out. He said the company will try and cover as much customer base as it can. “We will go where the volume is," he said.

Today’s customers are knowledgeable, said Kalsi. With the proliferation of the mobile, digital and social media, they can access diverse information ranging from vehicle performance to cost of ownership and financing to ownership and after-sales experience. “This will drive the need for a personalized and relevant customer experience," he said.

According to a March report by consultancy EY on the future of automotive retail, to transform a customer from buyer to brand advocate, trusted relationships need to be built by injecting trust-building attributes into every customer interaction.

“An integrated customer experience strategy is key to building loyalty, retention, and consequently, higher profit margins in sales and after sales," said the EY report.

There are two more reasons why Maruti is putting its money on Nexa. First, no company has ever tried to create a network of this kind and scale in India. Globally, car makers, such as Nissan Motor Co., Toyota Motor Corp. and Honda Motor Co. have similar models where they sell luxury cars under Infiniti, Lexus and Acura brands. But these are aimed at countering the German marques such as the Mercedes-Benz, BMW AG and Audi.

In India, Nexa will be Maruti’s answer to other standard cars offered in the segment, such as Renault India Pvt. Ltd’s Duster, Ford India Pvt. Ltd’s EcoSport and Hyundai Motor India Ltd’s upcoming Creta compact SUV.

Second, in pursuit of premium customers, Maruti is adopting practices untested in the Indian mass car segment.

From hiring leadership training institutes Dale Carnegie and ITT Global to train its staff, and an international agency to design Nexa showrooms, Maruti is going all out to win premium customers.

There is more on offer, such as relationship managers being trained like air stewards, a paperless showroom and valet parking.

Will Maruti succeed this time around?

S-Cross will be the first model to be sold at Nexa outlets, and a lot depends on whether the new vehicle matches the hype of premiumness created around it.

S-Cross is a typical Maruti car that carries its inherent philosophy of offering customers value for money.

Powered by Fiat SpA-sourced 1.6-litre diesel engine (introduced for the first time in India), the car drove smoothly on the Nashik-Mumbai highway and cruised at 160km/h without hiccups. A detour towards Shirdi on rough, broken roads didn’t perturb the car either. The cabin is quiet.

Maruti will only offer the car in diesel variants with the other option being the 1.3-litre diesel mill that powers its cars such as Swift, Dzire, Ertiga and Ciaz.

The exteriors are in line with Maruti standards; some may like it, some may not. It is simple, classical and a Maruti customer will relate to it. A Hyundai buyer, though, may find the S-Cross design less appealing.

Once inside the car, it does give you a plush feeling with dark interiors, and an infotainment system with an 18-cm touch panel display and a navigation system. It has rain-sensing wipers, rear parking sensor display and disc brakes at all the wheels. There is ample leg space for the driver and co-passengers. The rear headroom could be an issue for people taller than 5’6".

On the safety front, dual airbags are standard across models, except for the base variant of the 1.3-litre engine version where it’s optional along with features such as rear-wheel disc brakes. It boasts of a high-tensile steel body, considered safer in the event of a crash. If priced right, Maruti has a winner on its hands. One cannot discount the company’s strong sales and service network, where its rivals sporting Japanese and European badges continue to struggle.

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Published: 05 Jul 2015, 04:10 PM IST
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