Maruti Suzuki in Indian Premium Car Segment

MARUTI SUZUKI & INDIAN PREMIUM political machine SEGMENT Interim cut across Marketing Management INTRODUCTION Indian automobile industry shortly contributes 5% to Indias current GDP of $1. 4 trillion. The projected surface in 2016 of the Indian automotive industry varies between $ 122 zillion and $ 159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards Indias GDP by 2016, which is more than double the current contribution. We bay window safely assume the rider auto market as a whole grows in the same phase if not more than menti aced above.Passenger autos live with sub classifications with in them and they ar as follows SEGMENTATION OF INDIAN CAR MARKET As per SIAM (Society of Indian Automobile Manufacturers) The classification of departments be through as per length of the vehicle, (Passenger auto discussion section) 1. A1 Mini Up to 3400mm (M800, Nano) 2. A2 Compact 3401 to 4000mm (Alto, beach wagon r, Zen,i 10,A-star,Swift,i20,palio,indica etc) 3. A3 Midsize 4001 to 4500mm (City,Sx4,Dzire,Logan,Accent,Fiesta,Verna etc) 4. A4 Executive 4501 to 4700mm (Corolla,civic,C class,Optra,Octavia, etc) 5.A5 Premium 4701 to 5000mm (Camry,Eclass,Accord,Sonata,Laura,Superb,etc) 6. A6 Luxury Above 5000mm (S class,5 series etc) 7. B1 Van Omni, Versa, conjuring trick etc 8. B2 MUV/MPV Innova, Tavera, Sumo etc 9. SUV CRV, Vitara etc A segment, B segment etc. were expenditured earlier. But instantaneously the segmentation in India is done on the basis of length. Maruti Suzuki India Limited, the leading passenger cars producer, currently holds a market share of ab let out 45% in the passenger vehicles segment. The dominant share of the current 45% has primarily catch from passenger cars that belong to the Mini/Compact hatchback or midsize taproom chair.As Maruti Suzuki started its trading operations in 1981 the needs of the countrys automotive industries were afford satisfactory/ instau ration level cars which Maruti in truth success fully catered to. But very recently the executive, agio and high life segment cars are growing more than 20% each year which is high than the growth of the compact passenger cars. Here is a data which reiterates the growth of premium segment cars in India. The data utters the issue forth of cars whose price is in the range of 15lakh to 30 lakh. Model 2004/05 2006 2007-08 2008 2009 2010 2011 Skoda superb Na 769 586 694 541 2078 BMW 3 series - - 946 1,075 (FY09) 1,155 2,220 (Jan-Nov) Audi A4 - - 102 1,050 1,658 3,003 4,210 (Q1-Q3) Mercedes c class 785 883 1,127 1,765 1,607 5,109 ( Jan-Nov) 3,233 (Jan-May) The above data distinctly shows thither is a strong growth in the premium segment that is being seen in the Indian passenger segment. So how far nooky Maruti Suzuki, a pioneer in sm every(prenominal) car segment, hitress the changing trends of Indian car market. Can it replicate the success of small car sales in to the premiu m segment also?In ready to identify the needs and the values of the lavishness class and their views and expectations on Maruti debut premium car segment we conducted the next interviews which are given under INTERVIEWS WITH POTENTIAL CUSTOMERS INTERVIEW 1 What is your compose? I am Prakhar Sharma. I am an electronics engineer and had been working for BEL for the last one year. At present I am a student in IIM Bangalore. Do you induce a sedan? If yes, which car? My father would be the just accepter of the cars that we possess. He is a Government placementr. We currently own a SX4 petrol version.It is the fully loaded petrol version, and we own it for over a year. Do you own any separate car? We do own a Maruti 800, which is around 20 years old. Apart from that, my father has his office car as well. We thought to the highest degree subverting a sassy car because the Maruti 800 was very old. What are the various factors you divvy uped forward you bought the car? broad ly speaking when a person is looking to buy a sedan, it is his second or third car purchase. in that respect are various factors masses picture while buying a car. Personally, the factors I observe that influence my quality are Style, Power, Ergonomics and driving experience.This is of course taking into account that legitimate minimum requirements are met by the cars in this category. What other cars did you compare with before buying the SX4? There are a number of options available in this price range. We had basically zeroed down up on SX4 and Honda City. The Honda City is a really inviolable car as well. The best thing I samed about it was the experience. It is extremely smooth with a feather make power steering. The design and interiors are really nice as well. What do you choose the SX4 over the Honda City? We had a fixed reckon designate towards the car, with a flexibility of around 1 lakh.Within that budget the two cars I really liked was SX4 and Honda City. Howe ver, the Honda City base model would approach us as much as the SX4 fully loaded model (with all features already installed). So we felt that it was give value for bullion, and went along to buy the SX4. Apart from that, some other factors which influenced our decision was that primary(prenominal)tenance costs of Maruti is very low, unmingled parts are readily available and dont really cost that high either. If you are looking to get up to a higher end sedan, would you go for a Maruti again?Say Kizashi? If I assume that I do not dedicate any budget constraints, then I probably would not go for a Maruti. The bracing Kizashi searchs good as far as design and technical specifications are concerned, but the name Maruti has a perception attached to it. Maruti is the car that was believe by your parents and grand-parents, it is the car that al nearly every Indian owns. If I regard to own a high end sedan, I would privation to show it off as well. I feel that would not be asse r dishearten with the Maruti tag accordd with it. It does not experience that association of exclusivity.So I would rule out Maruti in the first place and go for a brand which is not possessed by too more mint. INTERVIEW 2 What is your profile? I am Vaibhav Singh, I graduated from IIT Kanpur. Currently am a PGP-I student at IIM Bangalore. Prior to joining IIMB I worked at field Instruments for almost 3 years. Do you own a car instanter? If yes what is the car Yes, I own a Maruti 800. What are the facts you like and nauseate about your current car? I feel a champion of safety in case of Maruti mainly because its a bank brand especially in India. Secondly its low on maintenance and its spares are readily available.Also Maruti has a strong service web. What I dont like about Maruti, I get misidentify as there are many cars in the same segment and its very difficult to select. Do you suck any other cars in the family? Which one do you like comparatively? Yes we also own a Fo rd Figo. I like Figo over Maruti 800 as it is modernisticer and has many more features. Are you planning to upgrade your car now? What are the key features you look for in the car? I may upgrade after in a couple of years from now and loosely to a sedan. The key features I depict look for would be i. sign value. How its comprehend in the market. ii.Quality iii. Price iv. Features If Maruti comes up with a in the raw car would you be willing to consider it? wherefore or wherefore not? I will mostly not consider Maruti as my option. The tenability is that I associate Maruti with low cost so there is a brand disconnect. I would rather consider a Honda or Toyota. What do you think about the new car Maruti has plungeed Kizashi? When I power saw the car it was portrayed as a sports sedan but I think the looks could energize been better. Basically, I dont perceive Maruti car as a sports sedan. When a car is that expensive it should also add spot which I think Maruti does not add.What can Maruti do so that you will consider it as an option? I think what most other companies have done by separating the brand specific for luxury cars, Maruti should do something similar. If possible leverage on some brand that concentrates on luxury segment alone. If not anything else, they should atleast use just Suzuki and not Maruti Suzuki to launch a car in targeted segment. Finally what are the two main reasons why you will not buy a Maruti in the luxury segment? 1. There will not be any status enhancement 2. I do not associate Maruti with high performance.I lone(prenominal) think it is low cost and reliable. INTERVIEW 3 What is your profile? I am Shobhit Agrawal from Delhi. I completed my graduation from St. Stephens College. Currently am a PGP-I student at IIM Bangalore. Do you own a car? If yes, which? Yes, we own a Volkswagen Polo for over a year. We also own a Maruti 800 but its not in a major use now. What you like and dislike about your current car? We bought P olo because it was one of the better cars in terms of performance in that price range. We cullred a top-end version of hatchback over a low-end version of a big car.Polo has many features and most authorizedly we wanted a car that is new and different from the ones generally present in society. So Polo met most of our needs. Theres nothing specific which I dont like so far. If you want to upgrade your car in future what will it be to? What are the key features you would look for in the car? If I upgrade my car in future, it might be to a sedan. winder features I would consider are i. Performance (engine) and mileage ii. Value for money The car should be ergonomically comfortable, it should have good features, better quality and good interior design & aesthestics iii.Brand It should make a statement. iv. It should also have a good dealership network and servicing network. Suppose you would want a luxury sedan, and Maruti launch cars it that segment. Would you consider Maruti as your option? Why or why not? As I mentioned the key features I would be looking for in a new luxury sedan car, If I feel that a Maruti sedan meets my requirements, I may consider it as my option. But since such an investment is considerably large and extremely infrequent, brand will also play an important role in selection as it is a status symbolism.Whats your view about Maruti Suzuki SX4 and Kizashi compared to competitors in their segment? When I see SX4 against Honda City, SX4 seems to be disgrace in class although it is not. Similarly if I compare Kizashi with Accord or Camry, Kizashi seem to be slightly lower. This I think is mainly because people associate Maruti with small cars than sedans and luxury cars. What do you Maruti lacks to be in luxury sedan segment? What should it do? I think Maruti lacks an image of luxury car maker. It is generally associated with small cars owing to its leadership in that segment.In order to be more successful, Maruti will have to devel op expertise and capability to vie in that segment. SURVEY ANALYSIS So from the discussions with the consumers we have come to the sideline conclusions regarding whether they would prefer to buy a Maruti in the sedan segment the quest conclusions can be drawn. 1) The major reason is that Maruti is associated with a low cost car. It is a very trusted brand as many of the people interviewed were either owners or had owned a Maruti car in the away and were very satisfied with the product.However the brand is not associated with a status symbol so people upgrading will most probably not prefer a Maruti make up if the product and the price is same of competition. 2) Another reason for non-acceptance is that there a real as well as perceived difference between the competitors and Maruti. When we compare higher end cars by Maruti with others in the segment, it fails to beat the established standards by other brands. For e. g. In a 2. 4 Lit engine car segment, it is perceived by the co nsumers that Toyota and Honda cars will have a superior engine than Maruti s engine.Also they are perceived to provide a better quality in terms of aesthetics to the buyer. For this reason, even though, Maruti Suzuki SX4 was launched in the same segment as Honda City, it was always considered to be lower than City. 3) One reason for people not to consider the car is that they feel the resale value will not be good. As many people in these segments buy cars and switch between 3-5 years resale value is an important consideration and this is where Maruti lags behind a lot compared to a Honda or a Toyota SOME POINTS WERE ALSO IN FAVOUR OF MARUTI ) Most of the people have already owned a Maruti and were very satisfied with the product and have a high opinion of its after sales service and cheaper spare parts so they think that compared to the others the maintenance cost will be low. Therefore after analysing the 4 interviews we can come to the conclusion that Maruti cannot be seen as a s tatus symbol that most people upgrading to higher end cars look for. However this segment is growing at a very fast rate compared to the average industry so this is a segment Maruti cannot afford to ignore.The advertisements and promotions for their latest car Kizashi also could not hand much excitement among the customers like what Mahindra Scorpios advertisements did so this could be one area they could look at. So the key questions going ahead for us will be * Maruti has enter the segment with its current brand the following table shows the specifications of Maruti Kizashi and its competitors Technical Specification and Pricing * As shown in the table above even with similar specifications and competitive pricing Kizashi was not able to catapult its sales figures as done by Accord (3324 units 2005-06) and Camry (794 units 2005-06).So the impatient question is does it need a new brand either fully made by themselves like Toyota did with Lexus or should they come into collaborati on or acquire a luxury brand and enter into the market * go out Maruti be able to use the current distribution channel to in effect market the cars? With the same dealership network having two types of customers, one targeting an introduction level hatchback and the other targeting a luxury sedan served in effect? Or will they need a new dealership network for high segments cars for specific target consumer which can be a dear(p) affair.