With 44% growth in subscriptions, Maruti Suzuki to expand the model across India

Indian automaker Maruti Suzuki’s subscription model saw a 44 per cent growth in FY24 YTD taking the overall user base to over 10,000.

The company started the subscription model in 2020 wherein instead of buying a car at full price, consumers can subscribe the vehicle for between one and four years and pay monthly rent including insurance, vehicle cost, maintenance and roadside assistance. Brezza, Baleno, Grand Vitara, and Ertiga contribute 53 per cent to the overall subscriptions.

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“Our research showed that in some of the bigger cities there is a trend whereby the type of ownership is now becoming different. A lot of consumers are now looking at renting and paying a monthly sort of rent for assets, which otherwise were traditionally purchased. We wanted to try in the segment and introduced the subscription model as a pilot in Gurugram and Bengaluru,” Shashank Srivastava, Senior Executive Officer - Marketing and Sales, Maruti Suzuki India Ltd, told businessline.

Maruti Suzuki has invested in advertising the subscription model to make it popular and is undertaking special training programmes for sales executives at the dealer level. The model covers 25 cities including Mumbai, Delhi-NCR, Hyderabad, Chennai, and Bengaluru with the latest addition of Vishakhapatnam. The company is getting 10,000 enquiries with nearly 600 vehicle sales every month and plans to expand the model to other cities.

Demographic

“Using between 12 and 16 months, it could be after the end of the subscription you can return the vehicle. You can extend the subscription or buy back the vehicle. There are largely three segments of customers that are attracted to the plan. One is what we call convenience seekers, people who are going out of their home city for a short time, they may not want to go through with the inconvenience of buying, or selling an old car. Second are prime customers, they are the consumers who want to experience a new car experience every few years. Third are aspiring millennials, they are people who may not have a credit history, with EMIs and down payment being high, they are opting for the subscription model which has no down payment and no hassle of registration or maintenance,” added Srivastava.

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