Leveraging on its first mover’s advantage, Maruti had it easy when it came to setting things up. Large scale production 
had always been its forte and it knew that the competition may never reach its level in the short run. Since Maruti was the only manufacturer in a variety starved nation, it was entrusted with the responsibility to fulfil all demands. The eventual mass production capabilities it acquired were just a by-product of massive demand and Maruti has been successfully reaping the benefits of the past, keeping production costs down. I remember last year (September 2007), S. Nakanishi (he was Chairman then) had written in his statement, “The success of Maruti in India has been based on a sharp understanding of Indian car customers, and our ability to meet their changing needs... This is especially true in recent years, when competition has intensified and we have strived to maintain our leadership...” There’s no question that Maruti’s range of small cars – 800, Zen Estilo, Wagon R, Swift, and Alto – are all market leaders and invariably find themselves in the top ten sellers list (and even the soon to be launched Splash)!
For the uninitiated, the small car market is roughly divided into three categories, namely the A, B and B+ segment. With astounding sales of 568,833 units in April-March 2007-08 (SIAM), Maruti Suzuki, in totality, now sells almost 70% of what all the competition sells combined in these segments! With such an incredible hold, the company has evolved its products considerably; but in some quarters, as Namita Chhetri, President, Indian Council of Market Research (ICMR), commented to me, “the competition has beaten them to the mile. For example, when Hyundai Motor India launched its new compact, the i10, it was a cleverly thought out move, as the company positioned its new compact between Maruti’s present crop of B segment cars and the top selling Swift.” Hyundai understood its limitation when it came to a limited product range and its eventual marketing strategy was tailor-made. Spread out between Rs.3.39 lacs and Rs.5 lacs, the i10 therefore catered to a variety of customers and this alone was its number one USP. Maruti, on the other hand, never had such a versatile product in its arsenal.
The best selling Alto, for instance, came in just two straightforward versions at its launch – a fully loaded 1.1L VXi for the performance seekers and a smaller 0.8L LXi for the 800 upgraders. Since the Alto was projected as an entry level car that could replace the aging 800, even the larger hearted version was discontinued later on the belief that performance demanding customers would move up the value chain instead of buying a smaller car. This strategy was adopted even when the Alto alone had the capability to spread across at least three segments simultaneously, instead of just one that it catered to (and still does!). I’m no Conan Doyle, but in a strategy that I christen faulty at best, even the Zen and the Wagon R have no more than three variants. It’s obvious that as a future tactic, Maruti should necessarily also leverage on its customer reach. And definitely, the current portfolio of five models should be spread out even further for top inventory utilisation.
had always been its forte and it knew that the competition may never reach its level in the short run. Since Maruti was the only manufacturer in a variety starved nation, it was entrusted with the responsibility to fulfil all demands. The eventual mass production capabilities it acquired were just a by-product of massive demand and Maruti has been successfully reaping the benefits of the past, keeping production costs down. I remember last year (September 2007), S. Nakanishi (he was Chairman then) had written in his statement, “The success of Maruti in India has been based on a sharp understanding of Indian car customers, and our ability to meet their changing needs... This is especially true in recent years, when competition has intensified and we have strived to maintain our leadership...” There’s no question that Maruti’s range of small cars – 800, Zen Estilo, Wagon R, Swift, and Alto – are all market leaders and invariably find themselves in the top ten sellers list (and even the soon to be launched Splash)!For the uninitiated, the small car market is roughly divided into three categories, namely the A, B and B+ segment. With astounding sales of 568,833 units in April-March 2007-08 (SIAM), Maruti Suzuki, in totality, now sells almost 70% of what all the competition sells combined in these segments! With such an incredible hold, the company has evolved its products considerably; but in some quarters, as Namita Chhetri, President, Indian Council of Market Research (ICMR), commented to me, “the competition has beaten them to the mile. For example, when Hyundai Motor India launched its new compact, the i10, it was a cleverly thought out move, as the company positioned its new compact between Maruti’s present crop of B segment cars and the top selling Swift.” Hyundai understood its limitation when it came to a limited product range and its eventual marketing strategy was tailor-made. Spread out between Rs.3.39 lacs and Rs.5 lacs, the i10 therefore catered to a variety of customers and this alone was its number one USP. Maruti, on the other hand, never had such a versatile product in its arsenal.
The best selling Alto, for instance, came in just two straightforward versions at its launch – a fully loaded 1.1L VXi for the performance seekers and a smaller 0.8L LXi for the 800 upgraders. Since the Alto was projected as an entry level car that could replace the aging 800, even the larger hearted version was discontinued later on the belief that performance demanding customers would move up the value chain instead of buying a smaller car. This strategy was adopted even when the Alto alone had the capability to spread across at least three segments simultaneously, instead of just one that it catered to (and still does!). I’m no Conan Doyle, but in a strategy that I christen faulty at best, even the Zen and the Wagon R have no more than three variants. It’s obvious that as a future tactic, Maruti should necessarily also leverage on its customer reach. And definitely, the current portfolio of five models should be spread out even further for top inventory utilisation.
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