When Maruti Suzuki unveiled its Nexa dealership channel strategy, there were sceptics who wondered if the investments in the new premium outlets would pay off. Today, the Nexa channel has helped improve the overall image of Maruti Suzuki.

The company now wants to revamp a huge chunk of its existing, regular dealership network to cater to new age car buyers looking for a personalised dealership experience. The new Maruti Suzuki Arena dealership format strategy will see over a third of the 2,300 plus dealerships converted into plusher, modern and digitally enhanced outlets.

R S Kalsi, Senior Executive Director (Marketing and Sales), Maruti Suzuki, discusses the new strategy:

What was the logic behind the new Arena channel strategy?

Let me start by giving a little perspective. We felt we were lagging behind somewhere in terms of providing customers with a premium sales experience even though our product portfolio has undergone a drastic change over the last five to six years.

We thought that new age customers must be provided the kind of experience that their lifestyle requires. After all, their experiences have changed for everything they shop for compared to the previous generation. He/she now expects a much better experience when buying a car too.

That was how the Nexa project was conceived and has been very successful with an estimated 3,00,000 vehicles being sold through this channel during this fiscal. And the best part is that about 51 per cent of customers coming to Nexa never had Maruti Suzuki in their consideration before coming to this dealership.

We now realised that our existing Maruti Suzuki channel is about 30-35 years old. Though we had been doing various upgrades in terms of fascia and interiors, a big change was called for again because of the new age customers.

So what was the next step?

Our research showed that 70-80 per cent of customers in urban areas and almost 60 per cent in rural markets do research on the Internet before their car purchase.

The majority of them are now identifying the brand, the model and even colour before they set foot into a showroom. So we had to think about how to align their online experience with our showroom (experience).

Some of our dealers said that those sales are fine but showroom walk-ins were going down.

So when we did a deep analysis of this phenomenon, we found that customers weren’t making multiple enquiries and showroom visits like they used to before.

While our sales haven’t gone down, the walk-ins have reduced because customers have gone digital and do most of their work on the Net.

Can you walk us through the experience of going to one of these new outlets?

We have made the Arena channel as much a digital experience as it is physical. When the customer walks into this dealership after fixing an appointment online, the manager already knows what model he/she was researching about on the website and zeroed-in on. The dealership executive picks up from there and this is a delight factor for the customer to be received with details about his model search already on a tablet or laptop. This makes it a seamless online-offline-online experience.

At Maruti Suzuki, the buyers for the Alto are as important to us as Ciaz customers and we wanted to make their experience equally memorable. The new Arena showrooms have coffee machines, a family lounge, touchscreens to help the buyer accessorise his car on a virtual platform to get a look first and then take the purchase call. Arena is meant to be a comfortable place that also delivers a high quality dealership experience.

How do you plan to distinguish between Nexa and Arena?

We have a very clearly demarcated product portfolio for the two channels. Customer profiles are also different. Typically Nexa customers are not first time car buyers; a majority of them already have a car in the family. These are sophisticated customers who are considering a specific new option, and want exclusive treatment and quick closure of the deal.

In Arena, a bigger chunk of the customers are first time car buyers. They like to explore and check multiple options, and seek answers about the features and options they can maximise on the model.

These customers tend to spend more time at the dealership. They are inclusive and like to have an informal chat with the relationship manager, whereas Nexa customer interactions are usually more formal.

Surely, there may be some overlap in terms of the kind of buyer who will eventually use the channels. But we have created the differentiators based on the broad profile of models and target customers. We are very happy with the kind of initial response we have got for Arena.

What has the progress been like thus far?

We have already inaugurated 30 Arena showrooms. By this fiscal year end we would have finished about 80. And in two to three years we would have converted most of all our existing urban dealerships into Arena format outlets.

We may not touch rural yet because they are much smaller in size. About 700 dealerships in major metros and emerging market outlets in tier II and tier III cities will see this transformation.

In the interim, during the process of upgradation, we would refer to the other dealerships as Arena only and they will all have a common portfolio. We are also expecting dealerships to seek out and accelerate the process of converting to the Arena format.This will have a snowballing effect once the upgradation process gets initiated.

We have already experimented with the conversion of existing facilities and have templated the entire process. We have also standardised the materials and design to be used for these outlets so that uniformity in touch and feel is preserved.

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