[TusharK]

In July 2015, Maruti launched Nexa - the second sales channel for the company in India. In less than 3 years since its launch, Nexa has become the third largest retail network in terms of sales volumes.



In the first 10 months of the current fiscal (April-January FY2018), Maruti Suzuki sold 2,70,651 units through its Nexa chain, which puts it in third spot behind Maruti's regular sales channel which clocked total sales of 10,88,998 units followed by Hyundai's distribution network at 4,43,727 units. According to the Society of Indian Automobile Manufacturers (SIAM), fourth placed Mahindra sold 1,99,968 vehicles ahead of Tata Motors which clocked 1,67,208 units during the same period.

Reports indicate that Nexa outlets amounted to 19.9% of Maruti's overall sales volumes during the period of April-January FY2018. In comparison, the same figure for the last fiscal stood at 10.9%.

Currently, Maruti sells the Ignis, Baleno, Ciaz and S-Cross through its Nexa dealerships. As of January 31, 2018, Maruti Suzuki has 299 Nexa outlets spread across 171 cities. The company plans to add another 400 outlets by 2020.

Source: The Economic Times

Link to Team-BHP News

[GTO]

Nexa was a master-stroke. Maruti initially communicated that it was the 'premium' arm of the company and all of us believed it. That was a load of bull. The real reason for Nexa was to:

1. Expand the sales network. You can't have a new 'Maruti' dealership right across a 15-year old loyal 'Maruti' dealership, but you can certainly open a Nexa. And to keep existing dealers happy, they were offered Nexa outlets first.

2. Salesman fatigue. Just how many models can a single dealer sell? The same dealership won't be efficient in selling 15 models of the brand; better to split them up with the parent still having a majority and moving the new products to a fresh channel. Can bet you that the Baleno wouldn't be selling as much if it were in the existing Maruti showrooms.

3. When the current brand hits maturity, the only way forward is another brand. This is the exact reason that Hyundai is bringing in Kia. Simply put, another brand & another distribution channel.

4. Throw in some smartly dressed salesmen, iPads & a better ambience = premium. Then, try to generate fatter profits on your cars (example = Ignis' pricing).

Let's also not overlook the genius of TrueValue (related thread). If we were to rank brands by the number of cars sold, Maruti occupies 3 of the top 5 places (Maruti, Nexa, TrueValue) . The Indian market provided a huge opportunity to Suzuki and you could say that they've made the most of it.

[The Rationalist]

On a lighter vein, will we see another Maruti brand like Nexa! The way Nexa is generating volumes, it won’t be long before it generates as much volume as Hyundai does. But have to give a round of applause to brains behind Nexa, as there were many pundits who thought it won’t work. A gentle reminder to take what pundits in any field say with a generous serving of salt.

[SJM1214]

Originally Posted by GTO

1. Expand the sales network.

And now, they are expanding their network. They are coming up a with a new Nexa showroom at my hometown Anand ( a C grade town). We don't even have a Macdonald at Anand.

I happened to visit this under construction showroom( owner of existing showroom and Nexa are same). The owner told me that they(Existing showroom sales team) are not able to cope up with the demand of Anand district and lots of out of territory sales happen. As per him, Nexa will ease the pressure on the sales team and they will be able to convert swift's inquiries in Baleno's sales. In fact, the owner already a hired a corporate training agency to train his salesforce the art of upselling.

By the way, If Nexa is third, who is second? MS TrueValue?

[volkman10]

Originally Posted by SJM1214

By the way, If Nexa is third, who is second? MS TrueValue?

Hyundai retains the second spot.( TrueValue figures are not known yet)




Source:ET

[Amit_breakfree]

And this is when the only high volume sellers in Nexa are Baleno and to some extent Ciaz. Ignis and S Cross are not high volume according to Maruti Suzuki's standards. With new products in Nexa such as Vitara and others, the sales are only expected to increase further.

[S.MJet]

If there was no Nexa, had the sales numbers been any different? I doubt.

To me, Nexa is just a new name of the shop which sells Maruti Suzuki cars. Nexa surely provides premium ambiance & pre-sales experience but there is no great premium feel as far as the products it sells is concerned (vs non-Nexa cars). In fact, its just the ambiance, pre-sales experience at a regular Maruti showroom can't be said as inferior to Nexa, sales numbers say this.

[PrideRed]

Originally Posted by S.MJet

If there was no Nexa, had the sales numbers been any different? I doubt.

To me, Nexa is just a new name of the shop which sells Maruti Suzuki cars. Nexa surely provides premium ambiance & pre-sales experience but there is no great premium feel as far as the products it sells is concerned (vs non-Nexa cars). In fact, its just the ambiance, pre-sales experience at a regular Maruti showroom can't be said as inferior to Nexa, sales numbers say this.

Ciaz was moved from Maruti to Nexa, is an example which confirms above. To a common man however Nexa indeed is a premium outlet, with cheapest car costing almost 6lacs. The Nexa and Maruti do have an overlap but if you see price ranges, Nexa sells cars ranging from 6-15 and Maruti sells cars ranging from 3-12.

[GTO]

Originally Posted by Amit_breakfree

to some extent Ciaz. Ignis and S Cross are not high volume

Ignis & S-Cross would never be high volume due to their pricing & unconventional styling.

Last month, the Ciaz was no.1 in its segment. For most of last year, it's either been no.1 or no.2 (rarely no.3).

Ignis = Good for an overpriced car whose objective is profit margin.

S-Cross = Facelift is averaging 3,000 / month so far, while the previous one was a bit over 2,000. Not excellent, but not bad for an ugly looking + expensive car powered by a puny 1.3L engine.

Originally Posted by S.MJet

If there was no Nexa, had the sales numbers been any different? I doubt.

They would, for the simple reasons of increased network coverage & more focused marketing. Right now, Nexa dealerships are 100% focussed on only 4 cars.

[veyron_head]

I need to eat my words on Nexa. I thought it was stupid of Maruti to launch Nexa as their 'premium' arm. I mean, Nexa from Maruti isn't like the Lexus of Toyota that they would need a separate 'premium' brand. But they pulled it off so well ! They didn't even have a seperate service facility for Nexa until recently. Yet, they managed to create that differentiation between the two brands and made them both super successful.

[vsrivatsa]

Originally Posted by GTO

Throw in some smartly dressed salesmen, iPads & a better ambience = premium. Then, try to generate fatter profits on your cars (example = Ignis' pricing).

Not just the better ambience, I would say the overall car buying experience itself feels good. My experience in taking delivery of the Ignis in 2017 was much superior to my delivery experience of the Honda City in 2014. The customer does feel pampered with the Flowers, Chocolates and Cake - the feel good factor is definitely there.

To add to the fun, the same sales guy who had delivered my Honda City was now working at Nexa and was present during the Ignis delivery too... (looks like the Nexa outlets have poached sales guys from other brands)

My relatives also felt the same recently once more when we compared my cousin's Ciaz buying experience with my Uncle's Jeep Compass purchase experience. The Ciaz delivery was much more memorable than the Jeep Compass delivery...

[RaghuVis]

Hat's off to MSIL for pulling this NEXA strategy(Trick) on customers.
Slowly but surely the upper limit of their bandwidth is moving considerably north.

They have tapped three major sections of car buyers.

1) The new gen who have enough cash than what we had few years back- A peppy Ignis and A big Hatch Baleno.

2) The ones who are upgrading their first MSIL car and moving up the ladder. One big image MSIL was stuck with was "Kita Deta hei". Does MSIL have any new Ad's which is based of the fuel consumption saving concept?What we don't realize is that a big section of public who asked this question are ready to move up the chain after a decade in a small car. Usually when they do that, they never think of MSIL. They move to other supposedly "branded" cars. MSIL has correctly tapped a slice of that section of buyers with Baleno.

3) Those who want the reliability of MSIL with the pleasure of European cars. S-cross falls here. I think this is one area where they have flopped. It's not that they can't bring a petrol or automatic here. It's been almost 2.5 years since S-cross came and to say that they have production constraints is plain joke. They launched three absolutely new cars after that (Baleno,Brezza and Ignis) and managed to slot production for close to 30K cars every month for them.

The movement of Ciaz to NEXA is the real proof of success. I am sure MSIL has done huge research of every Ciaz purchase to see how much sales they would lose by moving. And by the time Ciaz moved to NEXA, there are close to 125 cities which has them.

Originally Posted by veyron_head

I need to eat my words on Nexa. I thought it was stupid of Maruti to launch Nexa as their 'premium' arm. I mean, Nexa from Maruti isn't like the Lexus of Toyota that they would need a separate 'premium' brand. But they pulled it off so well ! They didn't even have a seperate service facility for Nexa until recently. Yet, they managed to create that differentiation between the two brands and made them both super successful.

I don't think Lexus has a separate service facility in India yet. They will open it surely though and will do that faster than how it took for Nexa. Also Nexa Service outlets are not exclusive. That's going to be another difference wrt Lexus.

But agree with you that MSIL idea of Nexa would have been to replicate Lexus in a smaller scale. The implementation feels like how we see special effects in Indian movies. Although an improvement, cannot be compared to Hollywood standards(No Offence to MSIL).

[V.Narayan]

I say good for Maruti, good for the Indian customer - after all that's whom this is all about. This should give the likes of Honda and Tata something to think about and maybe even VW. The Nexa dealerships in my town are literally better appointed in looks, attitude and sales etiquette than the Volvo dealership here - and I say this as a happy Volvo owner. Nothing like competition to wake up the lazy and the sleepy.

[Cyborg]

When I went for my Ignis first service to the new Nexa service centre at Parel in Bombay, I was very impressed. The customer lounge, receiving cars and service bays are way, way better than Honda for sure. The Phoenix Mills Maruti service outlet is like a municipal office in comparison

The staff also try really hard to please and go out of the way to accommodate your requests.

I really hope it stays that way and does not deteriorate in time. Right now, Nexa

Cheers

[HKap]

I guess Suzuki is trying to do with Nexa what Toyota did with Lexus and Honda with Acura. They've been smart about this and drawn footfall by launching affordable cars under the Nexa name. I have no doubt that going forward they will be launching upmarket products and thats when the brand will detach itself from the Maruti Suzuki umbrella. They will get a new logo and will be just Nexa. They're building up to it for sure. They know that people will hesitate to plonk 25 big ones on a Maruti. The brand just doesn't pull that crowd. Nexa on the other hand, will.

The question is, would they have such a massive network on Nexa dealers had they started off by selling some 15L INR sedan? probably not. They would end up with a scale similar to that of Skoda. The Baleno etc will continue to be bread and butter models while the future vehicles (EV?) will be more upmarket lower volume, higher margin models. My 2 cents.