In race with Thar, Jimny now faces an uphill task

File photo of Maruti Suzuki’s Jimny.
File photo of Maruti Suzuki’s Jimny.

Summary

  • Jimny, Maruti Suzuki’s off-roading vehicle, has bombed. Since its launch in India nearly nine months ago, less than 17,000 units have been sold. In the first two months of 2024, Jimny sold less than 500 units. What went wrong and can Maruti fix the wreck?

New Delhi: On the evening of 18 February, a video of a Land Rover Defender—arguably the most accomplished sports utility vehicle (SUV) in the world—being pulled out of a snow pit near Gulmarg, Jammu & Kashmir, went viral on social media. Another similar clip showed Scorpio, one of Mahindra’s best-selling SUVs, getting stuck in the same spot.

The vehicle that pulled those two out of the rut was the diminutive Jimny, Maruti Suzuki India’s “off-road machine". On paper lighter and equipped with a much smaller engine, this was a case of a vehicle punching well above its weight.

“With its light-weight construction, it possesses impressive four wheel drive capabilities reminiscent of the Maruti Gypsy. The weight-to-power ratio contributes to its remarkable off-road performance," said Rattan Dhillon, a Chandigarh-based automotive enthusiast who is part of the city’s Gerrari Offroaders forum—its members go for weekend drives.

“It shines with its raw power making it an excellent choice for off-road excursions," he added.

In less than a year since its launch, Jimny is fast acquiring a cult following in the niche segment of true blue off-roaders that Dhillon belongs to. In many ways, it is reminiscent of its predecessor, Gypsy, which had a three-decade long stint in the country and remains a fan favourite among rallyists and off-roaders.

Yet, in India’s crowded auto market, Jimny has dug a hole for itself. And Maruti Suzuki may find it difficult to pull it out of that hole.

Since its launch in the domestic market nearly nine months ago, in June 2023, less than 17,000 units have been sold. From a high of 3,778 units in July, sales have steadily declined. In the first two months of this year, less than 500 units have been sold.

Thus far, this year, it is the lowest of the 17 models that Maruti sells in the country—below even the dated Ciaz sedan and the much more expensive Invicto 7-seater multi-utility vehicle.

At the same time, Jimny’s only direct rival, Mahindra Thar, has grown its tally consistently, from 4,000 units sold in June 2023 to nearly 6,000 in February 2024 (see chart).

“While both cars share the same off-road features, there are notable differences," Dhillon said. “Thar offers a more powerful engine and larger size. It has greater seating capacity and cargo space making it more suitable for those who require additional passenger or storage options."

Sold through Nexa dealerships, this is a rare failure for Maruti, India’s largest car maker with a market share of 42% in the passenger vehicle market. More so, because SUVs are all the rage in the country now, accounting for over half of all passenger vehicle sales. Compact SUVs—both Jimny and Thar are in this category—form a third of the market (see chart).

Jimny sticks out like a sore thumb for Maruti also because it tempers the momentum it gained in SUVs. Maruti nearly doubled its market share in the domestic SUV market, from 10.5% in 2022 to 19.7% in 2023. In a hotly contested battle, it was a close second to Mahindra (21.6% share). In fact, in the third quarter, when sales of Jimny were high, it nudged ahead of Mahindra. As volumes shrunk in the last quarter, Maruti lost the edge.

The question is what went wrong?

Price hurts

Jimny is not a new car. It has over five decades of global off-roading pedigree. First produced in 1970, in Japan, over 3.2 million units of the SUV have been sold worldwide till date and it did particularly well in Latin America, Middle East and Africa.

Maruti Suzuki is renowned for knowing the pulse of the consumer. But in this case, did it get the India pricing wrong?

The slowdown in Jimny sales was all too sudden and took Maruti by surprise.
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The slowdown in Jimny sales was all too sudden and took Maruti by surprise. (Reuters)

Launched at 12.74- 15.05 lakh (ex-showroom Delhi), Jimny was one of the most expensive compact SUVs in the country.

“The pricing was off from the beginning," said Himanshu Singh, research analyst at Prabhudas Lilladher, a brokerage house. The SUV launched with a four-wheel drive version (the engine powers all four wheels uniformly, resulting in better control) and a 1.5 litre petrol engine.

Four-wheel drive versions are more expensive than two-wheel ones (the engine powers two wheels) and a bigger engine attracts more goods and services tax (GST).

“This meant it attracted a high 45% GST rate which increased the price," said Singh. “It did not help that Mahindra launched the two-wheel drive version of Thar (in January 2023 at 10 lakh) and brought down the entry price. That has given them good growth."

Mahindra’s two-wheel drive version, with less than 1.5 litre diesel engine, attracts a GST of 31%.

We received feedback that Jimny’s price was higher by around 2 lakh. —Shashank Srivastava

 

The slowdown in sales was all too sudden and took Maruti by surprise. The company had started bookings of the SUV during the Auto Expo in January 2023 and by the time of the launch, on 7 June, it was sitting pretty with over 30,000 orders. Yet, by the end of the year, things had started unravelling. Dealerships were stuck with inventories. This forced Maruti to launch a new affordable variant, Thunder, which was cheaper by 2 lakh. This discounted version was aimed at clearing the inventories.

“We received feedback that the price was higher by around 2 lakh. By August, there were significant cancellations as well," admitted Shashank Srivastava, senior executive director (marketing and sales), Maruti Suzuki India. “We do not want to carry much stock from one calendar year to the next for any brand. So, discounts during the year-end are a stock clearance exercise," he added.

Even then, sales have remained subdued. Jimny’s problems, therefore, go beyond its pricing.

Missed trick

Mahindra launched a three-door Thar in October 2020 and struck gold.
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Mahindra launched a three-door Thar in October 2020 and struck gold.

Early morning on 8 February 2020, the fourth day of the biennial Auto Expo in Greater Noida, there was an unusual flutter at the venue. Maruti showcased a three-door Suzuki Jimny. Tucked away in a corner and perched on an inclined platform, the vehicle, in its olive-green livery, quickly became the showstopper.

By November 2020, Maruti started production at its Gurugram facility for exports—to Latin America and Africa. But it dithered over launching the car in India, going by traditional wisdom that three-door cars are considered impractical by Indians. Did it miss a trick here?

Mahindra launched a three-door Thar in October 2020 and struck gold. Between October 2020 and October 2023, Thar sold over 125,000 units. “They always wanted a mass market play, which is why they chose not to launch the three-door version, which is already there in Japan. They waited for the five-door version," said Singh of Prabhudas Lilladher.

Wrong positioning

At the Auto Expo 2023 in Greater Noida, Jimny was a showstopper.
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At the Auto Expo 2023 in Greater Noida, Jimny was a showstopper.

Jimny’s five-door version was finally ready and showcased at the Auto Expo last year. It again garnered a lot of attention, prompting Maruti to open bookings straightaway. The company initially planned to sell 2,000-2,500 units every month. But it received 3,000 bookings on the first day itself.

“The decision to have a five-door version was based on the feedback we received from the 2020 Auto Expo. Initially, the response was beyond our imagination. We were sitting on bookings of over 35,000 units in a matter of just a few months," said Srivastava.

The initial response led Maruti into believing they underestimated the market. Now, they wanted to sell 100,000 units per annum globally with India accounting for two-thirds of it. At the current rate, it won’t even notch up a third of that target. Jimny had a wrong positioning to start with, Avik Chattopadhyay, co-founder of Expereal, a brand strategy consultancy firm, said. “Maruti thought Thar, which is a lifestyle vehicle for urban people to show off, is a competitor. People who enjoy the outdoors and off-roading look forward to a vehicle like Jimny. Maruti should have pitched for them," he added.

Lack of girth was another dampener. Developed in 1970, Jimny was conceived as a small light weight off-roader. It even spawned a Kei version—a category of cars in Japan that have 660cc engines and receive tax incentives. It has remained diminutive throughout. Even the erstwhile Gypsy that was based on the second generation Jimny, would be out of sync in today’s crowd of butch SUVs.

“Mahindra Thar, which is big and bold, comes with years of trust on ruggedness," said Puneet Gupta, director, S&P Global mobility, a market research and consulting firm. “To create a niche, Maruti needs to find the sweet spot in pricing and target early aspirational buyers. Currently, it doesn’t reflect a great proposition to the customers."

Though the five-door version is a bit bulkier—it has a 340mm longer wheelbase than the three-door variant—it still has a much smaller footprint. Jimny and Thar have the same length but Thar is wider (1,820mm vs 1,645mm of Jimny), has more height (1,855mm vs 1,720mm) and sits taller (226mm ground clearance vs 210mm). Since Jimny is a global platform, Maruti’s in-house research and development (R&D) teams had limited space to play with. “Unlike Fronx SUV, which is based on the Baleno, but allowed us a lot of scope to play, we couldn’t really meddle with Jimny too much," said an engineer at Maruti who didn’t want to be identified. “We would have wanted it to be bigger and wider but that means making a completely new car."

Exports, the saviour

In the last few years, Maruti has beefed up its exports strategy and has overtaken Hyundai to become the country’s largest car exporter. In 2023, Hyundai exported 164,000 vehicles from India. In comparison, Maruti exported 269,000.

The made-in-India Jimny can add handsomely to these numbers. In fact, it is already a hit overseas. It is exported to the Middle East, Latin America and African regions. In 2023-24, the car maker expects to export 24,000 Jimny units.

The export volumes, however, can offset underwhelming domestic sales only for sometime. The company also has to deal with a larger threat looming on the horizon. A five-door Thar is expected later this year. That’s an onslaught Jimny may find hard to defend. “Given that it is positioned against Thar, the latter’s five-door version can very well spell the end of Jimny," said Chattopadhyay of Expereal.

How to fix

But not all is lost. Analysts feel that if Maruti introduces a three-door and a cheaper two-wheel drive version, it could give more options to consumers.

“It is the only way Maruti can elevate sales, targeting a wider spectrum of customers by offering a wide choice in variants," said Gupta of S&P. “A sub 10 lakh pricing will differentiate Jimny substantially from the Thar. It can appeal to young and aspirational customers," he added.

Gypsy was a big draw with the armed forces and government security agencies.
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Gypsy was a big draw with the armed forces and government security agencies.

Additionally, Maruti is yet to target institutional sales which formed the bedrock for Gypsy. The latter was a big draw with the armed forces and government security agencies, including state police forces. With Gypsy being discontinued in 2019, there is a void to be filled in this market.

“This is a terrific vehicle for police, industrial and defence applications. It is far more capable than Thar in dynamic performance," agreed Chattopadhyay of Expereal.

Maruti says it is trying.

The car maker will look at all options to supply Jimny to the government, Srivastava said. However, this may take time as the vehicle needs to be built to certain specifications.

The current generation Jimny has a lower payload capacity—the amount of cargo that a vehicle can carry—compared to Gypsy. It may, therefore, need significant tuning.

A sub 10 lakh pricing will differentiate Jimny substantially from the Thar. It can appeal to the young. —Puneet Gupta

 

Maruti, meanwhile, is keen to work with people like Dhillon to exhibit Jimny’s off-road capabilities. Given that the number of hardcore off-roaders is still likely to be small, it will have to temper its expectations.

“I still believe Jimny has a potential to sell 2,000-2,500 units per month, which was our initial estimate. It will take some time but we will keep at it," said Srivastava. “Jimny’s off-roading capabilities are unmatched and eventually consumers will realize that. Our job is to make the market realize that."

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