[GTO]

We've been so busy with new car test-drives over the last year or so! I was just reviewing all our TDs & realised, it's been a l-o-n-g time since I tested a Maruti. Had a quick look and the all-new Maruti launched was way back in September 2019 (S-Presso). In the same time period, we have tested 9 Hyundais (including spicy variants like the i20 N-Line) and 7 Tatas (including the upcoming Punch & the electric Tigor). Clearly, other market leaders are pushing hard, while Maruti is resting on its laurels.

Everyone knows that fresh new cars are the best way to stimulate customer interest, maximise profits & draw footfalls to your showrooms. New launches are critical to staying relevant.

Where are the new Marutis? Their line-up sure is looking awfully dated + uninspiring. Other than a new-gen Celerio (which will really be more of the same thing...yawn), I don't see anything fresh in the near future. The company had better watch out as its long-term position could weaken. Sure, Maruti has been enjoying good sales (September aside), but those are the fruits of the previous years of labour. I'm talking more about the coming 5 - 8 years and the company looks dangerously unprepared.

- Poor crossover / SUV portfolio. In a market that has greatly moved to them.

- No product in the 15 - 25 lakh segment which is the new "goldmine" of the Indian car industry. Why goldmine? Because it gives previously unseen volumes & fat profits, both. Forget the MNCs, Tata & Mahindra have developed competent SUVs in this segment, but Maruti simply doesn't have the in-house capability. How the heck can a company with 50% market-share miss the most important new segment in the market? What were the Maruti CEO, product planners, strategists & analysts doing??? Busy with 4-lakh rupee Altos?

- Poor R&D capability. Truth is, Maruti doesn't know how to build a class-leading modern engine, AT gearbox or premium product. It's great at cutting costs, in an era when the Indian customer is ready to pay extra for a premium car & premium experience.

- Selling terribly outdated technologies. E.g. same old 1.2L K-Series (no turbo-petrol).

- Out of touch with the next generation. I help a lot of people buy cars, and hardly any <30 year old in the recent past has called me about buying a Maruti. On the other hand, I get a whole lot of calls for Hyundais & Kias, Tatas & even MG Motors! Sure, this is anecdotal evidence, so make of it what you will.

- Jerky AMTs, but no proper ATs. Maruti's torque converter dates back to the 90s! Who the hell sells a 4-speed AT with an overdrive button today? Only dudes wearing bell bottoms.

- Out of tune with emerging customer tastes. Safety? LOL .

- Features such as panoramic sunroofs, ventilated seats, audio systems with subwoofers & amps...where are they? The customer's wallet size has increased, but Maruti has nothing to offer him / her there.

- No BS6 diesel on sale. 2/3rds of Creta sales are still from the diesel.

- The focus & money has moved inside the cabin. When was the last time a Maruti interior impressed you? Meanwhile, do check out the Astor by a newbie auto entrant. Sucks to say this, but Maruti's management needs to spend the coming 7 days in MG, Hyundai, Kia, Tata, Mahindra showrooms. Maruti is serving tap water when the customer is demanding bottled water!

- Tata is selling two affordable "proper" EVs. Meanwhile, Maruti keeps harping about its smart-hybrid tech which offers marginal benefits at best. Is Maruti ready for an electrified future?

- Maruti has always been lazy with new tech & trends. They didn't have MPFI ready and were banned in Delhi when BS1 came (Hyundai Santro was on sale though). They fought diesels all they could but when it realised you can't change customer preferences, they borrowed a 1.3L diesel from Fiat. Smart move, although it again shows their poor R&D capability. CVTs, turbo-petrols, 6-speed torque-converters? It's like asking a skilled carpenter to fly an airplane. Maruti is awesome at doing what it has always been doing = cheap cars, FE, great customer service, cutting costs, mass production etc. but it is greatly missing all the emerging trends. Much like McDonalds = superb fast food network, but you really don't go there for a premium experience, or healthy eating right? A "happy meal" isn't an aspirational purchase for you, is it? In fact, I am increasingly seeing Maruti as the "McDonalds" of the Indian car industry. Both are dominant, yet both are getting out of tune with emerging trends.

- A simple missed trend that even your neighbourhood accessory store can manage. Fancy audio systems with subwoofers are all the rage today. But no Maruti still offers sound quality that truly impresses, does it? How difficult is this now?

I could go on & on. The point of this thread is, Maruti is not fighting as hard as it should to retain its dominating position in the coming 10 - 20 years. It is simply unforgiveable for a market-leader to not launch a new product in 2 whole years & miss the emerging trends listed above.

I'm a big fan of the S-Presso (cheap + fun + practical), but if this is all you have to show for the last 2 years...YAWN. Wake up, Maruti! In terms of long-term strategy, Maruti is as weak today as it was in the late 90s when it experienced its last major challenges. Blindly banking on Toyota for future tech isn't really a solution. To me, it seems like Toyota buying into Suzuki has made Maruti even more complacent!


Not just us car enthusiasts, even the markets appear to be disappointed in Maruti. Compare Maruti's share price performance to the NIFTY 50. Especially look at the contrast in the recent years:

[Everlearner]

Maruti's R&D budget should be the lowest in industry. They are surviving on their mileage claims and service network which in the long run may not give required growth in future, especially with growing awareness on safety and competition getting better.

They might just be banking on Toyota to drive their R&D and may have plans to merge and become a low cost division of big T

[abhi_krao]

True GTO. They will become like Nokia if they don't wake up. Was hoping their S-Assist to be some kind of IMT but even that turned out to be an app.

[vvrchandra]

A very good thread GTO and glad this is on market leader Maruti.

My current car is XL6 Alpha AT which I bought in Oct 2019. At that time I was on the lookout for a new vehicle and particularly a 6/7 seater. Innova Crysta is way ahead of my budget and the next alternative was XL6 besides Ertiga. I never thought I would get a Maruti. But I had to based on practical sense of the vehicle and low cost of maintenance/ownership though it lacks 6 airbags. I compromised on that part.

As of now I'm using it mainly for highway rides and the mileage I get is around 15 to 19 based on how it is driven. I now expect Maruti should atleast launch a variant of XL6 with 6 airbags for me to retain as their customer. Down the line when I think of what vehicle to get after this sometime in 2022, there are choices now such as Alcazar and the yet to launch Hyundai/Kia MPV which are probably scheduled to launch sometime in 2022.

Maruti should definitely fill the 15 to 20 lakh segment with new vehicles of crossover/suv and MPV type with better safety like 6 airbags and 6 speed AT.

[shancz]

Brilliant and perfectly timed.
After the multiple issues with others it would be natural to look at MSIL for options but those same old faces kill the enthusiasm in an instant.

IMO every point you mentioned is the topic of a thread in its own right but will touch on a couple from recent experience.

Originally Posted by GTO

- Out of touch with the next generation.
- Out of tune with emerging customer tastes. Safety?

- Had been recommending a friend multiple cars from MSIL, TML and Hyundai. He took TDs and booked the i20 Asta. I sat inside for a short drive and and reason was clear. That car gives you a very uplifting feeling as if you've entered a different world. Try the car in the night if you think I am exaggerating

- Safety is a big one, they can't afford to falter here in the long run and it's already late. Most MSIL recommendations carry a safety disclaimer and that doesn't bode well.

The title sums it up perfectly.

PS : If they come up with a limited edition stickering and garnish in the name of a change I might throw something at them

[Durango Dude]

There was a time when everyone's first car was a Maruti, including mine and that M800 held resale value like a 'Fortuner' of today. Not any more! Absolutely no innovation and a product portfolio that's rapidly aging given the new car launches we're seeing. Even at the entry level, Renault is doing a commendable job than Maruti. The three cars that are keeping it aloft are the Swift, Brezza and the Ertiga. The sheet metal gets thinner and thinner in the name of 'crumple zones' in the near future you could probably 'crumple' a Maruti and stuff it your pocket instead of parking it anywhere. I hate Maruti for one thing: AMT's, they popularized this trash so much that many other maker's jumped on this bandwagon and offer their products with these AMT 'jerks'. 5 years ago I suggested an Alto as my son's first car: My kids came down on me like a ton of bricks and put their foot down and said NO, he got himself a Grand i10 automatic which is what an entry level should like...I think: refined, solidly put together and reasonably easy on the pocket. Fully agree with GTO, Maruti is loosing the plot, slowly and steadily.

[Rajeevraj]

Very thought provoking post and totally agree. I have also been talking to several people on the look out for new cars and not once has a Maruti been part of the discussion. Even here in the forum, it's not often a Maruti is listed or offered as a choice even in the < 10L segment. Of course these are skewed samples, but still gives an indicator of the way things are changing.

What is still working for Maruti in my view is their network both sales and service. They still cover India like no others have done but that is an advantage that is getting chipped away slowly.

In the past the first time buyer( myself included) would typically start in the lower segments where pretty much Maruti rules, but now even a lot of the first time buyers start at the B2 segment where there are lot of stong products from other manufacturers present and many are coming in.

Maruti seems to have decided a strategy to just keep focusing on the under 10L segment. While other manufacturers have taken over the 10L+ segment and will continue chip away in the lower segments , the dark horse in this race I see is Tata Motors, provided they keep building on the good work they are doing. The product portfolio is strong. If sales and service can scale up to Maruti levels over the next 5 years, Maruti will have a lot to be worried about.

Actually surprised that Maruti does not have a roadmap of fresh products planned. Especially in the 10-20L segment.

On a related note even Honda seems to be doing nothing. Someone I know recently walked into a Honda showroom and walked out with a City. A car that at one time was a status symbol and commanded significant waiting times. I would add Toyota to the list but they atleast have a strategy of rebadging Maruti cars ( although it seems to be a flawed strategy destined to fail )

[Bibendum90949]

Few years down the line, Maruti may well become a case study for business schools on how a company dug it's own grave by sitting on it's past laurels. This lack of vision on future also has to do with the conservative thinking of few key people at the top management. They're blinded by the fact that cash registers are still ringing pretty well with all these long in the tooth models. It's a matter of time Maruti starts to stare down the barrel.

It's another matter they lack the R&D capabilities altogether. They're now heavily reliant on Toyota where the big daddy itself has finally accepted EV is the future after being rigid with hydrogen tech for long. It's only very recently that they announced a slew of EV plans when other biggies have already run many laps. Toyota is still sitting in the pit stop in the EV race.

Many in the circle of family and friends reach out to discuss on new car purchases. The only Maruti
which someone whom I know bought in the last couple of years is a pre owned Gypsy , since the buyer wanted a cheap, no frills, yet capable 4*4. Rest all have been Hyundai, Tata, Mahindra, Kia, Renault etc. Wake up Maruti from your deep slumber !!

[Akshay6988]

I had shortlisted Brezza while shopping but the moment I sat inside the car, my mood just turned gloomy. Felt like when I used to go to school in a Omni van. Interiors were dreadful. Sorry no offense to either owners but I won't pay 12 -13 lakhs INR to have same interior bits from Alto in my premium Maruti.

[ABHI_1512]

Sleeping you say GTO, I say they are not bothered as long as competition gets redundant with each passing year. Maruti is a segment leader in the sub 10 lakh bracket and auto majors have bitten the dust competing with them. Chevrolet and Ford are gone for good despite having robust cars, Honda is now a one car wonder and Toyota doesn’t exist beyond Innova and Fortuner.

So basically, Maruti has only Hyundai to take care off in the segment and they are doing it pretty well. We all know that Maruti never bothered making cars beyond the 10 lakh bracket and the mighty Kizashi and S-Cross 1.6 are the living examples of their strategy.

Such is their so called strategy that despite continuing with only petrol cars policy, they are doing pretty well. R&D is their achilles heels and that’s why they joined hands with Toyota. Rebadging cars and selling at the places where Toyota is strong is another way of telling their intentions where they gain the economies of scale and staying in relevance works for both the entities.

Maruti is doing well despite not doing anything and that’s even more ominous for the auto industry. They are good with their bread and butter vehicles and least bothered about innovations let alone bringing some new generation vehicles in tune with the times just like Hyundai does every now and then. It’s no surprise that Maruti Dealerships don’t actually care much for the customer experiences since they know their vehicles will sell irrespective of anything. That good products fail and exit the market is an added incentive to stay put just as they are, innovations be damned !!

[ajmat]

Originally Posted by GTO

Everyone knows that fresh new cars are the best way to stimulate customer interest, maximise profits & draw footfalls to your showrooms.

Originally Posted by Everlearner

They might just be banking on Toyota to drive their R&D and may have plans to merge and become a low cost division of big T

We should ask Toyota the same question also. Using Maruti’s backbone makes it an invertebrate! The Yaris was better engineered than the Ciaz/Belta

[Thermodynamics]

Exactly for these reasons stated by GTO, I exited as a long term share holder of Maruti and entered Tata Motors. Share holders need a line of sight, where Maruti has been utterly disappointing.

[fhdowntheline]

Originally Posted by GTO

Clearly, other market leaders are pushing hard, while Maruti is resting on its laurels.

Great post which summarises the market condition of the market leader. Let me just extend this further and substitute Maruti with all Japanese car manufacturers, i.e. Honda and Toyota and the picture is even further clear !

[BoneCollector]

How can you say Maruti is not launching anything new? Just look at the ads they keep on throwing at us, Kitna deti hai, Safety blah blah.

Maruti is not sleeping at the wheel, it's slept a long time back. It has missed the bus. And they'll realise it later after a few years. People in my know-how who were loyal Maruti fans have picked up Ford and Tata. Why? Because Maruti had nothing to offer in their price point and safety. I have suggested a Tiago as an entry level car for my BIL. And he may wait for Punch now. Maruti has been selling the same doorpad switch combination since a long time and without any change! It's like flogging a dead horse. If I have to replace a car today, I will have to look at options other than Maruti. Service issues are a different thing altogether so won't comment from that angle.

[Hayek]

Interesting post. Though Maruti is still able to sell every car it can make, barring some folks who bought the XL6 as a cheap Innova, I don’t know anyone who owns a recently purchased Maruti anymore.

Frankly, Marutis lack appeal to the affluent, urban car buyer. And as people become more conscious of how Maruti has deliberately designed cars to be unsafe, this lack of appeal will grow. But I think what they are counting on is that you have an emerging neo-middle class in small town India, who are transitioning from
Scooters to their first car, and see Marutis as offering good fuel efficiency, low maintenance costs, greater safety than 4 people on a scooter, and the pleasure of buying the largest selling cars in the land.

Back in 2001 or 2002, as a young banker, I had built a model for Maruti’s future sales since we were pitching for the IPO - and even our pitch model did not assume they would retain more than a 30 -35% market share beyond 4-5 years (perhaps that so why we didn’t get the mandate). So their having retained a ~50% share for two decades more is incredible, and unprecedented. So let’s not count out this company - they have shown time and again they understand India much better than most urban affluent Indians.