In conversation with R S Kalsi, Senior Executive Director, Sales & Marketing, Maruti Suzuki India
Car India (CI): With GST and demonetisation hitting car sales, 2017 was a challenging year for the industry. Despite this Maruti Suzuki ended the year on a high note. How did you manage to do it?
R S Kalsi (RSK): The year was very challenging with several disruptions, but these things keep happening to the market and economy in general. What is important is how well one is prepared for such disruptions; how quickly can one shift one’s strategies and how well one copes with it. I can safely say that at Maruti Suzuki we were able to handle it very well. Demonetisation was done in November 2016 and in December we recorded an all-time high sale, which in itself says a lot. In fact, we went on to clock a robust growth of nearly 14 per cent in the first three quarters of 2017. There were some favourable factors as well, such as the good monsoons in the last two years and the government’s Budget which has been focusing on development. These gave a positive momentum to us. On the whole, it was a challenging yet very fruitful year for us.
CI: What do you think about the higher taxes on hybrid cars?
RSK: It did cause a disruption. The point here is that the customers aren’t willing to pay more for environment-friendly vehicles. Customers always compare price with value proposition. If I talk about the Ciaz, earlier our hybrid penetration was about 70 per cent which, after the revised taxes, has come down to 32 per cent. However, the impact wasn’t very high because we offer both conventional and hybrid versions of the car.
CI: How are your last two launches, the Ignis and the Dzire, doing now?
RSK: We had positioned the Ignis as “none of a kind”, a car for the millennials. A very different car, compact and spacious. When launched, we expected it to sell between 4,000-5,000 units a month and at present it is selling over 4,000. It is going according to our expectation.
The Dzire is an iconic model and the outgoing model was selling 16,000 to 17,000 every month. The new Dzire is totally different in terms of style, interior, look, and feel. It has been designed as a sedan right from the beginning, unlike a hatchback being made into a sedan. It has received an overwhelming response and has set a sales record of over one lakh units within the first five months.
CI: What is a Maruti Suzuki Arena dealership?
RSK: When we introduced Nexa, we tried to make the dealership as interactive and paperless as possible. We employed a new workforce and didn’t allow dealers to transfer their existing workforce to Nexa. The new relationship managers that we recruited were more tech-savvy and had a better understanding of the digital space. This helped in providing a better experience to our customers coming to the Nexa dealerships.
Moreover, there is a big shift in terms of the customers’ thought process and the way they buy cars. We noticed that the footfall in the showrooms was reducing but our sales were on the rise. Our research showed that the “Zero Moment of Truth” (when a customer makes up his/her mind about buying a particular model) has now moved from the dealership to his/her laptop or smartphone. About 70 per cent of our urban customers go online and make up their minds ― which car, model, colour, and variant, etc ― even before they walk into a showroom. Through the Arena channel we provide a seamless online and off-line experience to our car-buyers. When a customer fixes an appointment to visit the Arena showroom, our relationship manager is informed through programmatic platforms the extent of their research. This creates a wow factor for the customer. Besides, the Arena showroom has touchscreen tablets and even a café and lounge to make the experience even more enriching.
By the end of this financial year, we are aiming at 60 Arena showrooms and in the next two to three years we will convert all Maruti Suzuki dealerships into Arena.
CI: Tell us about the Concept Future-S…
RSK: We are inspired by the changing trends of the Vitara Brezza which deviated from a masculine, monstrous-looking SUV to a more compact urban SUV with a sporty design. The Future-S is a sub-four-metre compact concept vehicle and is a big deviation from our conventional designs. I would say it’s more of a design direction. Now we have to wait for customer feedback and customer clinics and make some more changes accordingly. Some changes will be implemented keeping the manufacturing point of view. This will take time before it comes to the floor. It certainly is a reflection of the changing trends and tastes of the youth.
CI: What are your plans for 2018?
RSK: The Swift is the first launch for this calendar year. Then we will be coming with two minor upgrades of existing models and two complete model changes. This is in line with our announcement of having 15 new models and updates by 2020. The Swift is the ninth launch since the announcement. So, the next couple of years are going to be exciting.
