Maruti Suzuki – the desire to win !

In this day and age of fierce competition, especially in segments like Telco and Automobiles, Maruti Suzuki holds a staggering 45% share of the Indian passenger car market. With competitors flooding the market place, its leadership clearly indicates its knowledge of the Indian consumer’s changing wants and needs, its evolving sense of appeal, its ability to produce high-performance vehicles in multiple segments and its mastery in lean manufacturing. One would assume that Suzuki’s Japanese roots would have a significant role to play as far as cost efficient manufacturing is concerned.

Maruti Suzuki has been rolling out one winner after another at a rapid pace. The Maruti 800’s tremendous success in the Indian market made Maruti a synonym for the compact car segment, much like Nokia in its heyday was synonymous for mobile phone.

The 800 probably outdid itself, considering that it was launched in 1983. It was the best selling car in India until 2004. Two decades of dominance not only speaks volumes of Maruti’s power as a brand but also the conservative Indian consumer mindset. Due to limited players in the marketplace, it was comparatively easier for Maruti (in conjunction with its Japanese venture partners) to stay ahead of the mediocre competition and satisfy the Indian palate.

India’s emergence as an outsourcing and offshoring destination led to the kick-start of a developmental revolution in sectors such as technology, infrastructure and education. Development sparked opportunity for both domestic and international participants and very quickly, the empowered Indian consumer was spoilt for choice, in terms of consumer durables and non-durables.

The changing scenario of the Indian market also saw an evolution in Maruti Suzuki’s way of thinking. Recognising the changing demands and new consumer segments that it could tap into, Maruti produced a variety of vehicles, targeting each identified segment. It upped its ante not only in terms of power and performance but also design and quality. The next super-hit after the 800 was the Maruti Esteem which was a visual delight and sold by the bucket loads for an astonishing fifteen years, until phasing out in 2008. Maruti’s rugged variant, Gypsy, also enjoyed tremendous success, especially with the defence forces. Even in the year 2010, twenty-five years after its launch, Maruti Gypsy has a waiting period of over 3 months. Through the years, the Gypsy underwent enough changes and additions to maintain, if not increase demand. More recently, the Swift (coupé) and Swift dzire (sedan) are the new sensations in the small to medium segment. Despite trouble with workers at the manufacturing facilities, consumers are willing to wait for 7-8 months to get their hands on the brand new Swift (coupé).

Low maintenance and convenience has been a consistent theme in Maruti Suzuki’s adverts. With widespread Sales, Distribution and Servicing networks, and locally manufactured parts, running costs are seldom a concern for the consumer.

Maruti has been cleverly playing the national and emotional cards in its ads, through the punchline “India comes home in a Maruti Suzuki.” In this ad, it showcases a large number of its variants, as the broader theme is more the consumer’s connect with Brand Maruti Suzuki rather than the specific benefits of each product variant.

Click to view Maruti Suzuki commercial

Maruti has made its mistakes as well. Kizashi, its entry vehicle in the luxury segment, failed miserably. There seem to be three clear reasons contributing to Kizashi’ downfall. (1) The car was significantly over-priced. The mid-sized sedan was fully imported, and cost nearly 50% more than what it was priced at in the US. (2) Brand Maruti Suzuki is not a luxury brand. (3) Kizashi did not have a diesel variant, as opposed to its competitors. Despite the luxury tag, diesel variants do attract high demand. A low-cost, low-maintenance pioneer introducing a luxury vehicle, thus turned out to be too ambitious and too risky a move. What should be kept in mind is that the Kizashi presented a very impressive package, despite its price tag. With a Honda or VW logo, it would have probably sold a lot more vehicles. Brand power (or the lack thereof) in the luxury segment is probably what did Maruti most.

Despite the Kizashi debacle, Maruti Suzuki has been very consistent with its core values, as mentioned on its website - customer obsession, fast, flexible and first mover, innovation and creativity and openness and learning. Openness and learning was clearly exhibited through its foray into the luxury segment, pulling the plug as soon as it anticipated a bleak future and a rapid launch of Swift v2.0, another runaway success in its ‘bread and butter’ segment.

Maruti Suzuki is a brave brand, and fortune favours the brave. It is not afraid to experiment and more often than not, it produces impressive machines backed with highly effective marketing and advertising campaigns. It might be just a few more variants away to successfully foray into the luxury segment.

Knowing Maruti Suzuki, the innovations will continue, the brand equity will further improve and it will break through into the premium segment, where bigger margins await. Maruti Suzuki has what it takes – it has desire (and the dzire) to win !!