Monday, March 10, 2014
By John Andrew
Maruti to exhibit its strength
Maruti Suzuki is on a drive to boost its image from being a maker of small cars to one that manufactures technologically-advanced vehicles across several segments. The nation's largest carmaker will set up brand centres at upmarket locations across India to showcase its products and emerging technologies. The strategy assumes significance as the first phase of its Gujarat plant is now funded entirely by its Japanese parent, Suzuki Motor, through a wholly-owned unit. That leaves Maruti with room to invest its cash surplus of Rs 7,000 crore in other areas. Maruti plans to set up these centres at 16 prominent and strategic markets that generate more than half its sales. In the first phase, it has shortlisted places like Kolkata, Kochi, Chandigarh, Chennai, Jaipur, Indore and Bangalore.
"The company is in the process of acquiring land across different strategic locations, which are either state capitals or located in the vicinity of its regional marketing offices," a senior Maruti Suzuki executive said. "Based on the successful concept of the brand centre situated at our head office in up market Vasant Kunj in south Delhi, these 16 centers would purely engage customers to our new products and modern technologies that the company plans to debut in India." It plans to spend about Rs 50-60 crore each to buy properties in posh locations with the total investment expected to be in the region of Rs 1,000 crore. The company would develop impressive boutique structures at these places. These centers will cater to only brands and will not transact any kind of commercial business of selling or servicing cars, the executive said.
Maruti is concentrating not just on its bred-and-butter small compact cars business, but is also increasingly diversifying into new areas like multi-utility, crossovers and sport-utility vehicles, which now form more than 20% of the Indian passenger vehicle market. It had successfully launched the Ertiga multipurpose vehicle in 2012 and it plans to debut the all-new SX4 S-Cross and the CIAZ sedan later this year. Besides, a range of SUVs and light commercial vehicles are also on its list for the future. The brand centers would showcase new products and allow customers to directly interact with the company, a move that Maruti expects will help generate long-term positive brand perception.
Confirming the move, Maruti said work was in progress to set up these facilities which would be rolled out in a phased manner. "There are plans to expand the marketing set-up across India," a company spokesman said. Maruti already owns around half-a-dozen plush sales outlets. Located at prime locations such as Lokhandwala in Mumbai and Indraprastha in central Delhi, these outlets have been handed over to dealers to transact commercial business. These prime showrooms operating in shopping hotspots and glitzy malls in the metros have helped Maruti penetrate deeper into larger urban markets that account for a major chunk of the new cars sold in India.
Source : Economic Times