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How Maruti plans to keep Alto going strong

MURALI GOPALAN | Updated on January 20, 2018


CV Raman Executive Director (Engineering), Maruti Suzuki India

Big thrust planned in rural India while wooing young buyers

CV Raman laughs when I ask him when the Alto will touch the four million mark. After all, it was just this week when Maruti Suzuki’s entry-level model crossed three million in cumulative sales.

Over the last 16 years since it made its debut, Alto numbers were slow to begin with before gradually gathering speed to touch one million in its eighth year. The next million was achieved faster in barely four years and it took marginally less time to reach the last million.

Staying relevant

As Executive Director (Engineering) and someone who has been associated with the brand since its birth in India, Raman has reasons to feel pleased with this landmark achievement. While refusing to comment on a timeframe for four million, he makes it clear that confidence in the Alto should not result in complacency.

“The entry-level will continue to be relevant since a car is an aspiration product for the first-time customer. It is as important as buying a home and it is our responsibility to keep the cost of ownership low,” says Raman.

In other words, this means keeping the price point affordable while constantly improving fuel efficiency.

As the country’s top-selling model, Alto sales have been averaging around 2.5 lakh units for many years now even while customers are transiting to premium hatchbacks and compact sedans.

In the case of Maruti, its Swift Dzire is quickly catching up with the Alto and may even surge ahead next fiscal.

Raman, however, maintains that the sky is the limit for the Alto even while making it more attractive to a younger customer base remains challenging.

“The average age of the buyer is coming down and we need to keep this in mind,” he says.

For the moment, a considerable portion of Alto owners could be classified as ‘conservative’ since they prioritise issues like price and fuel-efficiency.

And while these will continue to be the USPs for the Alto, Raman hints that going forward, there will be greater focus on other features intended to attract the youthful buyer.

With higher levels of disposable income, the entry-level customer may perhaps be inclined to pay a little more so long as he/she can flaunt the car to relatives and friends.

This is where Maruti plans to pull out all stops and make the Alto an attractive, yet affordable, option.

Long way to go

There is also another reason for Raman’s optimism about the brand’s longevity even while compact sedans are catching up. Car penetration levels in the country are still less than 20 per thousand which literally means there is a huge market waiting to get its hands on an entry-level car.

Yet, for most of these people, the best starting point for mobility is the two-wheeler which is far more affordable. “We will have to target Tier 3/4 regions more aggressively to boost sales of the Alto and reach out to those customers keen on an upgrade from a two-wheeler,” says Raman. At one level, this script sounds familiar as this is precisely what Tata Motors had set out to do with the Nano.

It is clearly something that Maruti would not like to replicate with the Alto and the challenge would be to constantly strike the balance between offering more mileage and features while still keeping its price low. The company will also leverage its biggest strength in retail and after-sales while pushing the Alto further into rural India where a potential market is waiting to be tapped.

Keeping on track

Maruti is also aware of competitive pressure in the entry-level segment with many new entrants in the market. the latest entrant, the Renault Kwid, already having clocked over one lakh bookings. Can a 16-year-old brand stand up to a new kids on the block which is making a strong statement as a challenger? It is here that Raman and his team plan to work doubly hard in beefing up the Alto.

They will also rely on past experience to keep the momentum going. After all, it was not as if the model was a runaway success at the time of its launch. Sure, the intent was perhaps to replace the Maruti 800 which was decades old but was still in no mood to sign off in a hurry.

Customers still liked the 800 and it took a lot of hard work in positioning the Alto as a serious value proposition before it began to clock the numbers.

The pace gained momentum when the 800 bowed out and today, the Alto is the leader of the pack. Parent company, Suzuki has already achieved a record mileage of 37 kilometres per litre with the lighter 660cc Alto launched in Japan over a year ago.

This is at least 10 kmpl ahead of India numbers and Raman laughs once again when asked if this can be equalled or even bettered. Clearly, it is not going to be an easy task for the option sold here but there could well be some surprises in store.

Published on March 03, 2016

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