June 25, 2014: Maruti Suzuki is in the pursuit of finding a sweet spot in the Indian market again. After a decade long leadership in compact car segment, the company had challenges in sales turn over recently. However with the launch of Ertiga, it seems the company is back to its best again getting its market share to 50%. The success of Ertiga has made them realize that they need to target the segment of customers who are planning to upgrade from compact to mid sized Sedans and SUVs.
Around 14 million customers bought compact cars in the last decade with a majority of them Maruti’s customers and it would be an ideal time to target them as they may be planning for an upgrade. Maruti Suzuki plans to leverage this by launching 6 models more into the Sedan, SUV and premium luxury segment. These new models include Ciaz Sedan, Suzuki S Cross in SUV cross over segment, a compact SUV model and then premium hatchback models.
Pricing is key for the success of this strategy, the success of Ertiga and failure of their premium versions of Kizushi and Grand Vitara SUV proved this. They have come to the conclusion that Rs 6 to 14 lakhs is the right price range to target the segment who are upgrading from compact cars to Sedan and SUVs. The buyers in the price band above Rs 15 lakhs are not the Maruti loyalists and hence it may take more time to penetrate that segment and compete against established German brands like Mercedes and Audi.
It seems finally Maruti Suzuki has realized its sweet spot again in the Indian market and this strategy could reestablish its supremacy in the Indian market and as a brand for the middle class Indians.
