Can Maruti ace the LCV market with its Super Carry?

After ruling the Indian car market for over three decades, Maruti Suzuki India is trying its luck with light commercial vehicles. Growing e-commerce and ‘Make in India’ have given a leg up to entrepreneurs and businesses, which require LCVs for the last mile delivery of goods.

But can Maruti replicate the success of passenger vehicles in the LCV segment, which is currently dominated by Tata Motors’ Ace?

For now, it seems Maruti has done its calculations diligently. “Our customer profiling showed that 50 per cent of them are self- employed, having captive requirements for distribution and delivery of goods. It was a big opportunity and we thought it was the right time to enter the market,” RS Kalsi, head of marketing and sales at Maruti Suzuki India, told BusinessLine .

By “right time”, he is referring to the country’s macroeconomic situation, which has been changing, with the environment being more conducive for entrepreneurship.

“Smart cities, GST, and e-commerce require mobility-related solutions. And since the real estate is costlier in cities and people are moving to outskirts, the last mile connectivity is becoming even more important,” he added.

Branded as ‘Super Carry’ in India with prices starting at ₹4.01 lakh, the LCV will compete with Tata Ace, which is available in multiple variants ranging from ₹2.28 lakh to over ₹5 lakh.

Maruti has developed a new LCV platform for India, Africa and other Asean countries and its turbocharged 0.8 litre two-cylinder diesel engine has been developed by the local R&D team.

VG Ramakrishnan, MD, Avanteum Advisors LLP, says a big plus with Maruti is the significant advantage of carry over parts from their other auto platforms.

“They have a high level of indigenisation, with negligible imports and all this will ensure they are able to keep the price in control.”

A total of 3.8 lakh LCVs were sold in FY-16 and the number is expected to grow by 11-13 per cent over the next five years.

Over 50 per cent of the market is owned by Tata Ace, which was launched in 2005. What boosts Maruti’s optimism is also its network of 3,200 service centres across the country.

“We are entering the market as a challenger and we have some core strengths. Our widespread service network is a key differentiator. Here the uptime of vehicle is important. We are well positioned to address any service-related requirement in the shortest possible time,” Kalsi points out.

Maruti has set up a separate commercial channel for Super Carry.

“An LCV customer is a functional buyer and focused on performance. The dealerships will be set up in a small area of 500 sq ft to keep dealer overheads low.”

The company is also setting up a separate corporate identity for the commercial segment -- in bold red and white colour.

“This clearly distinguishes the brand (from the passenger vehicles segment). We are separating the brand but leveraging the core strengths and I don’t think the LCV will have any negative rub off on the Maruti image,” he clarifies.

To begin with, Maruti is launching Super Carry in Ludhiana, Ahmedabad and Kolkata. It is targeting to cover five States this year and be a pan-India player by 2017-end.

Kalsi says the company will first understand customer expectations and then consider any addition to the product portfolio.

“We have focused on good load carrying capacity.” Super Carry provides a space of 3.25 sq mt and can take on a load of 740 kg.

Ramakrishnan believes Maruti has got all the ingredients right – a well-known brand, wide distribution and low costs.

And the market is also ready to absorb more stylish and powerful LCVs.

Yet, the extent of Maruti’s success is something that will unfold only in the next few years.

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