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For Maruti, GenNext is key in growth drive

Murali Gopalan | Updated on: Mar 22, 2018
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MD, Kenichi Ayukawa, says young India wants the best in styling and design

Kenichi Ayukawa has little reason to complain. Since he took charge as Managing Director and CEO of Maruti Suzuki India in 2013, he has seen its market share grow from 38 per cent to 50 per cent today.

Almost its entire product range has hit the bull’s-eye in this intensely competitive market and, more importantly, has helped grow its image beyond being just a small car manufacturer. Today, products such as the Dzire and Vitara Brezza are growing from strength to strength and have established Maruti’s dominance in sedans and SUVs.

In the premium hatchback segment, the recently-launched Swift has already caught the eye of the market and is on its way to becoming a winner. The retail network plan of Nexa and the more recent Arena drive is also working as as customers throng Maruti showrooms.

Cautious approach

Yet, Ayukawa refuses to be complacent. “Tomorrow is another day and just because we are successful today does not mean we can guarantee success tomorrow too,” he cautions. After all, he reasons, competitors are pulling out all the stops too with new entrants such as Kia Motors quite vocal about their bullish intent. “We cannot take too much for granted,” says Ayukawa.

Even while Maruti has been diversifying its portfolio, compact vehicles remain its bread-and-butter business simply because of the vast untapped potential in India. After all, car penetration levels here are still low at barely 30 per thousand people even while it is on its way to becoming the third-largest automobile market in the world by 2020.

“Compact vehicles is our core business and we need to focus on this product range,” says Ayukawa. The fact remains that lots of people still don’t own cars in India and this explains why small offerings will continue to rule the roost in the years to come.

He adds that customers are also getting increasingly fastidious about sporty design and styling. This is where concepts such as the Future S, showcased at the recent Auto Expo, become critical. “We need to prepare products like this for the future, especially for young generation customers who want them,” says the Maruti Suzuki chief. “We keep trying to come up with a new approach for these kinds of products and meet people’s expectations.”

New-gen buyers

He believes it is quite a challenge anticipating demand, especially with expectations changing so rapidly. Today’s product may become irrelevant tomorrow and it is, therefore, important to stay focused on the growing base of young customers “whose tastes and thinking are different from our generation”.

As Ayukawa says, the only way to meet this challenge is to ensure higher levels of creativity within the organisation where “we have to constantly look at the future and implement ideas”. This means more dynamic and aggressive styling/design for the future since it is a given that the customer will constantly demand more.

In the process, the people within the Maruti ecosystem will constantly need to push the envelope in creativity to keep pace with the new generation customers. With younger people joining the workforce every year, this will help facilitate the transition and keep energy levels high.

Beyond this, Ayukawa believes it is important to constantly work on developing even more fuel-efficient and environment-friendly cars. “Society expects these kind of products and it is our responsibility to deliver the right ones,” he says. It is here that the Toyota, Suzuki collaboration on electric vehicles could see some interesting developments beginning 2020.

Ayukawa points out that there are a host of challenges to cope with in India’s e-mobility space in terms of infrastructure, affordability and so on. The Centre has now put its much-touted electric vehicle policy in cold storage. But this does not take away the fact that more energy solutions are needed in the automotive space.

“Fuel prices are increasing and it is important to keep in mind that a country such as India has to incur huge payments for its oil imports,” says Ayukawa. Keeping this in mind, he believes it is important to focus on increasing fuel efficiency across Maruti’s product range while also looking at alternatives to petrol and diesel. India is already Suzuki’s largest car market worldwide and the Japanese parent is now keen on giving it a more important rolefrom the viewpoint of servicing other regions. These would typically include countries in Africa and Latin America where customer requirements for cars would be pretty much on the same lines as their counterparts in India.

This is where Ayukawa believes the Gujarat plant will play a big role as an export hub given its proximity to the port. The present facilities in Haryana are disadvantaged and consignments to the nearest port need to traverse hundreds of kilometres by road where cars risk being damaged en route.

Once all the production lines in Gujarat are up and running, ideally by 2020, the component of Suzuki exports from India will increase substantially. By this time, its overall output will have crossed two million units annually, of which at least 15-20 per cent (nearly four lakh units) will be shipped out overseas.

Setback in two-wheelers

While Suzuki has every reason to feel pleased with its car business in India, the same perhaps cannot be said for its two-wheelers, which started around the same time in the early 1980s through a joint venture with TVS.

After the two parted ways, Suzuki set up its own two-wheeler operations in Haryana but really could not make an impact though things have been looking up lately. From Ayukawa’s point of view, it is important that the company’s two-wheelers strike a strong connect in the market.

“If motorcycle customers like the Suzuki brand, they will come to its cars,” he says. “It is, therefore, important for them (two-wheelers) to do well and keep their quality levels intact.” With sales of its motorcycles and scooters on the rise, and plans now in place to touch a million units annually by 2020, it looks as if Suzuki is finally getting its two-wheeler act in place.

However, unlike its more successful car arm in India, it still remains a marginal player compared to Hero, Honda, TVS and Bajaj. Despite this, a presence in the world’s largest two-wheeler market is important, especially when some of these buyers graduate to entry-level cars. Maruti is already a formidable entity but a strong Suzuki presence in bikes and scooters will be an added bonus.

Published on March 22, 2018

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