Growth from only two models is a concern: Maruti Suzuki

[wildon]

NEW DELHI: Concerned over sales growth coming mainly from two of its models -- Dzire and Swift -- country's largest carmaker Maruti Suzuki India

said unless its other products contribute equally the company could face problems in the long-term.

Addressing its dealers at their annual meeting in Bangkok yesterday, MSI Maruti Suzuki India (MSI) Managing Director and CEO Shinzo Nakanishi said: "My concern is about the quality of our growth. Although we achieved good overall national numbers, the region-wise and model-wise performance was not uniform. We relied mostly on Dzire and Swift to power our growth."

The company's performance in many other models was not upto the mark, he added.

"The wide range of models and our national presence are competitive advantages for us. We have to take full benefit of these competitive advantages and focus on all models and all regions.

Without improvement in these areas, we may be able to grow for one or two years, but we will face a problem in the long term," Nakanishi said.

Last fiscal, the company recorded a rise of 3.57 per cent in its sales at 7,92,167 units compared with 7,64,842 units in the previous fiscal. In April, 2009, MSI sold 71,748 units as against 62,336 units in the year-ago period, a growth of 15.10 per cent.
Maruti Suzuki, however, did not share the sales figures of individual models.

Commenting on the road ahead, Nakanishi said MSI had identified new areas of growth during the last financial year and would continue to strengthen those areas.

"Last year, we identified new opportunities in the rural market and government employees. Those efforts are being strengthened and will further power our growth this year," he added.

Nakanishi further said that irrespective of economic and market situations in the country, MSI would have to sell "much more than competition".

Source:[ ET ]

[pranava999]

I am not at all surprised with Maruti's concern. It's because of not having a customer centric product lineup/launch and positioning in the recent past. It's so difficult to differentiate between their small car range as almost all of them have similar engine specs and platforms, all it will achieve is to eat into each other's share within the portfolio rather than attract buyers from other brands. It has ignored opportunities in the other segments such as a replacement for the 800,esteem, boleno, a 5/7 seater compact SUV, a MUV to take on the innova and Xylo.

[YC.BALENO.CHD]

Originally Posted by pranava999

I am not at all surprised with Maruti's concern. It's because of not having a customer centric product lineup/launch and positioning in the recent past. It's so difficult to differentiate between their small car range as almost all of them have similar engine specs and platforms, all it will achieve is to eat into each other's share within the portfolio rather than attract buyers from other brands. It has ignored opportunities in the other segments such as a replacement for the 800,esteem, boleno, a 5/7 seater compact SUV, a MUV to take on the innova and Xylo.

Ehh? Tough differentiating between their small car range?
Well,hyundai has santro,i10,i10 kappa,getz.
Maruti has wagonR,Estilo,Astar,Ritz,Swift.

Alto and 800 are in different category.
SX4 and dezire too are not in same categories.

And most of the sales for both the manufacturers come from these models only. So how does it affect the overall sales? I mean yeah someone may get confuse between estilo and wagonR and ritz and Swift.
Same for Hyundai it is. One may get confused between santro and i10 irde, getz 1.1 and i10 irde, getz 1.3 and i20, and i10 kappa and getz!!!!

Both the manufacturers have largest portions of the market.
The absence of growth can be attributed to economic crisis, even its the diesel now which sells much more than petrol for both the swift and dezire.


So I do not think it has anything to do with the positioning. I mean has anyone heard of people already confused between estilo and wagonR, increase the confusion and finally setteling for santro or i10 irde??!!



And please, I know baleno never did well in the market and I really do not mean to offend you but its 'baleno'. Actually Bolero and Baleno never had a love child named Boleno.


Regards.

[theMAG]

The Ritz will add to those numbers substantially due to the diesel. Their current dilemma is that the 1.3 DDIS engine is the sole reason for people buying their cars currently. If that diesel engine were to be kept out of the picture, then all their models would sell fairly uniformly like before, based on who preferred what level of rattling.

[pranava999]

@YCBC First off sorry about the 'o'. It's a spelling mistake. Am sorry I upset you. By the time I noticed the error I could not edit it.

Second when I say positioning I don't just mean names here. Hyundai has been very successful in implementing their strategy in a very phased manner and have a more apparent pricing differentiation as well as a model progression. Anyways mate, it's just my personal opinion. There's no harm in Maruti trying the same but there should be an apparent strategy and thinking to it that communicates a certain method to the madness.

In any case I respect your views and points. Thank you.

[gitartha]

i think that its mainly a case of playing to your strengths.Maruti Suzuki has always been a lmv manufacturer per excellence and maybe that what they will always do in years to come.I remember the case of kinetic motors(one time market leader in scooters) developing a CVT peoples car years before project Nano started, only to fall flat on its face. Agreed that there may be a demand for MPVs, but its certainly not in maruti's DNA(remember versa?). As regards growth from only two models as mentioned in the article, in the case of its only major competitor hyundai, remove i-10 and they will simply vanish from the surface of the earth. No amount of elantras, sonata's and tucsons are gonna be of any help.

(BTW worldwide suzuki has a compact low cost SUV named JIMNY. Wonder when it'll come to India)

[YC.BALENO.CHD]

Originally Posted by pranava999

@YCBC First off sorry about the 'o'. It's a spelling mistake. Am sorry I upset you. By the time I noticed the error I could not edit it.

Second when I say positioning I don't just mean names here. Hyundai has been very successful in implementing their strategy in a very phased manner and have a more apparent pricing differentiation as well as a model progression. Anyways mate, it's just my personal opinion. There's no harm in Maruti trying the same but there should be an apparent strategy and thinking to it that communicates a certain method to the madness.

In any case I respect your views and points. Thank you.

No you need not be sorry first of all. That was just a bit on the funny side.

Coming back to the topic, I do understand that the huge options available in that segment does confuse the buyer to an extent but then I am not sure if it has any substantial role to play in lack of growth in sales. Though someone associated closely with marketing of these vehicles may give a clearer picture.
Anyways, mine too is an opinion and then it may not be the most correct reason.


Regards.

[anjan_c2007]

MSIL was hidebound in its attitude earlier. Shows that there is some introspection now.

[YC.BALENO.CHD]

Originally Posted by gitartha

(BTW worldwide suzuki has a compact low cost SUV named JIMNY. Wonder when it'll come to India)

We already have the Jimny. Actually the previous gen Jimny is the Maruti Gypsy. It was and is still being sold as the Jimny Sierra in certain markets. While the current Jimny has again grown quite old and the next gen Jimny or a replacement for it must be in pipeline for international markets.

[arin_12]

Originally Posted by YC.BALENO.CHD

We already have the Jimny. Actually the previous gen Jimny is the Maruti Gypsy. It was and is still being sold as the Jimny Sierra in certain markets. While the current Jimny has again grown quite old and the next gen Jimny or a replacement for it must be in pipeline for international markets.

I think they have show cased the Jimny to indian market long time back but never bother to get one. MSIL may soon loose their market share. They should wake up. You have made enough profit from Indian Market... Fed up on seeing the SWIFT model in the road. Now its like a ration's vehicle. No offence to SWIFT owner.
MSIL/Suzuki, how many yr will you survive with this scrap model. Show some courtesy to the Indian Customer too People want some thing different.


Note from Mod: Post corrected. Please ensure grammatical/spell-check before posting. Thanks.

[YC.BALENO.CHD]

Originally Posted by arin_12

I think they have show cased the Jimny to indian market long time back but never bother to get one. MSIL may soon loose their market share. They should wake up.

Yes jimny had been showcased at Auto Xpo 2006 but it was later decided that the model would not be launched here. But we do have the Jimny sierra (nay the gypsy) which is a very capable off roader for the price.

Fade up on seeing the SWIFT model in the road.

Sorry, could not make out what you meant from this fading thing.

No offence to SWIFT owner.
MSIL/Suzuki, how many yr will you survive with this scrap model. Show some courtosey to the Indian Customer too People want some thing different.

Scrap model?! Come on it may not be to your taste but calling it Scrap?! Not the wisest thing to do. It hasn't bagged numerous indian and international awards for nothing.

And off late maruti has been generous. We have most of their latest models here and except for All new Estilo (MR Wagon) and the SX4 Hatch, we have everything right from the new alto (A star) to the Ritz (splash), with the new wagonR coming shortly.



And you want something different? Ritz can be yours. And Maruti has tried to be different time and again, remember the Zen Carbon & Steel? Or those numerous 'limited editions' it has launched of most of its cars.

Kindly be more reasonable with your posts sir, and yes no offense, am not a swift owner but calling a highly successful car 'scrap' (or u meant crap?) is surely not the way car enthusiasts like us should behave.


Kindest Regards.

[greenh0rn]

Hi guys, I think the big problem for Maruti has been poor replacements for their wildly successful Zen and Esteem. Zen's replacement as Estilo has failed to take-off, personally I find the car a misuse of Zen's brand. All that stood for stylish, small, cute, peppy has been turned on its head by Estilo.

Esteem too ruled the Indian market in its hey day, but it aged gracefully and made a reasonable exit. SX4 as the next generation/evolution of Esteem platform just doesn't cut any ice with me, turns out it doesn't with the Indian car buyer either. It seems Maruti wanted to make a giant leap into the future and ended up launching products that were so remarkable different from the previous generation, people simply failed to find a connect between the two.

Look at how Honda has constantly evolved its Citi over the years to understand the point I'm trying to make. Indian buyers wanted an evolution of Zen/Esteem. What they got was something that they didn't bargain for. Hence this mess.

[YC.BALENO.CHD]

Originally Posted by greenh0rn

Zen's replacement as Estilo has failed to take-off, personally I find the car a misuse of Zen's brand.

Esteem too ruled the Indian market in its hey day, but it aged gracefully and made a reasonable exit. SX4 as the next generation/evolution of Esteem platform just doesn't cut any ice with me, turns out it doesn't with the Indian car buyer either. I
Look at how Honda has constantly evolved its Citi over the years to understand the point I'm trying to make. Indian buyers wanted an evolution of Zen/Esteem. What they got was something that they didn't bargain for.

Yes, regarding the Zen and the Estilo I will surely agree with you.

However, SX4 is the replacement for Baleno. Esteem has been replaced by Dezire which is doing decent numbers thanks to the diesel variant.
Turns out that sx4 has done better than the Baleno, nothing surprisng though. But with soon to be launched diesel variant bright days seems to be ahead. Even the current petrol model sells well if you compare with sales of petrol fiesta,verna,linea,aveo.

As for the city, let me remind you how most of us had frowned when OHC was replaced by NHC and then when the good interiors and fuel efficiency of NHC had spoilt many of us silly, in came the ANHC with cheaper looking interiors and at best 'average' economy. Yes, honda has a connection with the market thanks to new age styling and the surprising snob value of Honda, but if you will see carefully you may not find many loyal city owners who have really welcomed the newer generations of the City.

[CrAzY dRiVeR]

Originally Posted by greenh0rn

Hi guys, I think the big problem for Maruti has been poor replacements for their wildly successful Zen and Esteem. Zen's replacement as Estilo has failed to take-off, personally I find the car a misuse of Zen's brand. All that stood for stylish, small, cute, peppy has been turned on its head by Estilo.

Esteem too ruled the Indian market in its hey day, but it aged gracefully and made a reasonable exit. SX4 as the next generation/evolution of Esteem platform just doesn't cut any ice with me, turns out it doesn't with the Indian car buyer either. It seems Maruti wanted to make a giant leap into the future and ended up launching products that were so remarkable different from the previous generation, people simply failed to find a connect between the two.

Estilo was the biggest mistake by Maruti in recent years. Let alone destroying a wonderful opportunity of cashing in on the zen brand, they introduced a car that would have a negative effect on their 'international' car maker image! To top it all, they rolled out pink cars for publicity.

But, IMHO Swift and DZire were the successors of Esteem, and they have done a wonderful job in that price bracket.

SX4 was supposed to take off where the Baleno had a tough match. Had a very good initial run! However, the competition has taken the game to the next level with the launch of ANHC and Linea. Maruti should have a diesel version [1.3 VGT (Or better still- 1.9 )]to win against the likes of ANHC and Linea.

WagonR is selling well, but its really old in the market now. They should consider a replacement for the WagonR as well. I feel Ritz will share sales with the Swift, rather than winning WagonR customers.

And Grand Vitara- whatever happened to all the scoops/news on petrol engine upgrade & diesel launch? Maruti seems too busy with small cars these days!

[Mpower]

Originally Posted by wildon

"My concern is about the quality of our growth. Although we achieved good overall national numbers, the region-wise and model-wise performance was not uniform. We relied mostly on Dzire and Swift to power our growth."

The company's performance in many other models was not upto the mark, he added.

Wow! they sell 20 year old car designs and they want growth !!

The only thing that surprises me is the lack of huge sales numbers from the SX4.