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Irony Meter: Why it’s difficult for elephants to dance

With India’s middle class rapidly moving up in its brand choices, Suzuki, the popular, genre-defining automotive brand, should launch a new brand that shares Maruti’s legacy of dependability but establishes a new dynamic in the consumer's mind, says the author.

by Karan Rajpal
July 31, 2023
in Featured, Exclusive, Opinion
Reading Time: 3 mins read
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Irony Meter: Why it’s difficult for elephants to dance
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Among companies only focussed on cars, Maruti Suzuki is India’s largest listed company. It is also the market leader for the past many years, producing more than half of all vehicles sold in the country. While the world’s tenth largest automobile brand, Suzuki has been a market leader in India for decades now.

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It has reinvented parts of its portfolio a few times, but each time, something of the original remains. And that old self is now about to rapidly endanger its dominance. It’s not the company’s fault – the market realities it operates in have been changing.

While the overall number of cars sold in the country remain at around 3 lakhs per month, the make-up of those car sales have changed, with yesteryear popular models like the Alto and the Wagon R giving way to midsize sedans and mini SUVs. And Maruti is catching up with new launches in the last year, and many planned for the next 18 months as well. It has also done well to rebadge cars for the fleet segment, with the Tour brand now available across taxi sizes.

And yet, Maruti stares at a great challenge, its tie up with Toyota not with standing. At its simplest, it’s this: consumers don’t want to buy a Suzuki vehicle priced over Rs.15 lakhs. When the time comes for them to upgrade, they simply move to another brand.

This phenomenon is neither new, nor singular to Maruti. Its most significant competitor, Hyundai, launched the Kia brand in part to address this issue, and has rapidly become one of the more popular brands in the mid-size SUV segment. Abroad, Hyundai aspires to compete in even higher categories, launching the Genesis brand in select markets globally. Toyota sells the Lexus and Land Cruiser brands, and the Volkswagen group has a plethora of brands, from the eponymous label, along with Skoda, Audi and even the Porsche and Bentley labels.

Maruti’s response to this challenge has been quite perplexing. Rather than launching a new upscale brand, it launched a new range of showrooms. Called Nexa, they sell a variety of models from the Maruti portfolio which are above a certain price point, or perception point from Maruti’s own POV. To no one’s surprise, while Maruti has had a few successes, they were likely because of the vehicle’s own selling points, rather than the signaling the showrooms provided to consumers. Kudos from stock market analysts (on financial performance alone), and the automobile press, who must appreciate each vehicle as a marvel, doesn’t hide the elephant in the room – brand Maruti has failed to grow with the country.

While absolute sales numbers by volume or value won’t tell us this, the average selling price of vehicles in the country has been rising and at each few lakh rupees, Maruti loses a few percentage points of market share. India remains a value conscious country, and Maruti’s dominance is not easy to shake. But, the winds of change are blowing among India’s 70 million strong consuming class, and Maruti is sticking to its size as the main selling point in a rapidly transforming market.

Laddering one’s brand to become different things to different people is perhaps one of the most difficult tasks in the history of branding. Line and brand extensions have been popularly used in various industries to create these effects, most popularly in the CPG category. For Maruti, perhaps the costs are too high. But, so are the stakes.

Some of the key reasons to buy brand Maruti as a vehicle owner are now category standards – dependability, great mileage, easy to find a service center nearby. From here, the brand must find ways to reinvent itself. Among them, the main call will be the toughest. To launch a new brand that shares the brand’s dependability, but establishes a new dynamic in the consumer’s mind.

It’s difficult to make elephants dance, but when they metaphorically do, it’s beautiful.

(Author’s note: Given the company’s rebadging to Suzuki in recent years, but most Indians’ love for brand Maruti, the two brand names are used interchangeably in this article)

(The author is Director – Marketing at EnableX, a Communications SaaS Company. He tweets at @ironymeter. Views expressed are personal.)

Tags: EnableXHyundaiIrony MeterKaran RajpalMaruti SuzukiToyota

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