14 February, 2011

STOP FOOLING YOURSELF MARUTI


Insaan ko apni aukaat kabhi nahi bhoolni chaahiye… the line spoken to death in numerous bollywood movies over the last several decades-- a warning given out to anyone who dared to cross his boundaries. But I guess, the people at Maruti Suzuki have not seen much Hindi films, otherwise they would not have the audacity to launch their latest car the Kizashi, which is recipe for a sure disaster!

The Kizashi is powered by a 2.4 litre petrol engine delivering 178 PS of power. It will be available in two variants — automatic transmission priced at Rs.17.5-lakh and six-speed manual transmission at Rs.16.5-lakh. Apart from being pricey, it looks like a grown up SX4, the company’s another mid size sedan struggling to survive.

It is also the first premium sedan launched by MARUTI, which produces eight small-cars in an attempt to shed its small-car maker image but sadly, it has got it all wrong.

History has proven that when it comes to selling cars above the 10 lakh bracket, MARUTI has always tasted dirt. Even in the segment above Rs. 7 lakh, MARUTI has either tasted short-term success or witnessed debacles. It is only the sub 7 lakh bracket where the company reigns supreme.

The first sedan offered by the company was Maruti 1000 in 1990 which was a huge success back then. It was followed by the Esteem with a 1.3 litre engine and upgraded features in 1994 which again was a success story and the car sold like hot cakes for almost 15 years until it was replaced by the Swift Dzire in 2008.

But that was back then when there was hardly any competition in the form of car models or for that matter, car makers. Maruti was up against the ageing Hindustan Motors' Ambassador and Contessa Classic and the Premier Automobiles' Padmini popularly known as the Fiat.

So, light weight, efficient and zippy petrol cars offered by MARUTI back then brought about an inevitable revolution as the masses were fed up of the old, boring cars with high maintenance and running costs which burned deep holes in their owners’ pockets.

Other competition like the Daewoo Cielo was a gas guzzler so was obviously rejected and the Ford brand was just taking off with its Escort which by the way sold in good numbers in the years that followed.

MARUTI was the leader back then and people had no other choice until the late 90’s and early 2000’s when companies like Hyundai, Toyota, Honda, Tata etc. stormed the Indian car market with diverse products that changed the country’s automobile scene forever.

The sedans offered by Maruti after the Esteem did not caught the fancy of the masses the way its predecessors did because the customers were now getting better value-for-money cars like the Hyundai Accent, Ford Ikon, Tata Indigo and even Honda City.

All these cars were class leaders and jolted the sales of various sedans offerd by Maruti over the years.

However, Maruti’s nightmare had begun many years ago with the Baleno. Even its replacement -- the SX4 launched in 2007 tasted short term success until the new Honda City with its i-vtec technology came to spoil its party. As of now, the situation is so bad for the Maruti sedan, that it will soon be launched in a diesel avatar in a desperate bid to combat the ever increasing sales of the Honda City.

But even sadder is the fact that suddenly, the number of SX4’s with ‘Govt. Of India’ printed on their number plates have surged in the capital. Maybe for 'old times sake' the government is doing a favour for its Japanese friend (as it no longer hold any stake in the company) and is distributing the sedan to its various officers around the country in a bid to clear the stock.

The only Maruti sedan that is doing great and is in fact a phenomenal success is the Swift Dzire which despite being an ugly duckling has managed to win the hearts of millions of Indians with its practicality, features and most important—its price, and here lies the truth behind Maruti’s success.

Majority of Indians are thrifty by nature. People like to get maximum bang for the buck here. The statement is further cemented by the fact that the top three manufacturers in the country—Maruti, Tata and Hyundai are known for value-for-money cars.

So, Maruti launching a car priced well above 16 lakhs is absolutely stupid. The brands in this segment need to have a snob value to sell. People would not spend such an amount on a car maker which takes pride in its high mileage cars what with the ‘Kitna Deti Hain’ ad campaign.

It is strange that Maruti still has not learnt its lessons even after the failure of their first SUV, the Grand Vitara launched a few years ago.The car failed miserably just because of its high price tag upwards of RS. 16 lakh.

With the launch of Kizashi, it seems the company is refusing to learn from its earlier mistake. Maruti must realize that the premium car buyer is willing to overlook a few features in his/her car provided it’s a premium brand. Maruti is just the opposite of this theory.

Why would a customer buy a Maruti product when they can lay their hands on a Honda, Toyota, Skoda or Volkswagen (VW) for the same price?

However, the company is saying that with the Kizashi, it is not expecting big volumes but is preparing itself to offer products in a segment which is likely to form a big chunk of the market in future. How ridiculous?

I am surprised at the fact that such a statement is coming from a company which brought a revolution in the Indian car market a couple of decades ago. They are either fooling us or themselves.

If the company genuinely wanted to enter the segment it should have done with a car loaded with features and a killing price tag of around 12 lakh i.e. offering better features and value than a Civic or Corolla but priced a few thousand rupees below them which would have made it an irresistible deal much like the Ford Figo which apparently has a waiting period of between two weeks to a month.

This way Kizashi would have given severe competition to cars like Honda Civic, Toyota Corolla, VW Jetta and Skoda Laura which are all best sellers.

But surprisingly and strangely, Maruti has placed the Kizashi at the top of this segment and for unknown reasons at the bottom of the segment above this which boasts of cars like the Honda Accord and VW Passat.

Sure, going by the engines, Kizashi is in Accord and Passat’s class but what about the space, looks, and once again BRAND?

This is suicidal from Maruti, how can it expect to conquer a segment of a car driven by strong brand image when it has failed in the segment below it. Absolutely surprising!

To top it all, the company is importing the car to India as a Completely Built-up Unit (CBU) which attracts more than 100 percent duty by the government.

Whereas, it should have imported the car as Completely Knocked Down Units (CKU) and assemble it here.

The company however, says that it will consider local assembly of the Kizashi if volumes justify doing so in the future. How much more foolish can they get? How will they get the volumes when the car is going to be a bigger disaster than the historic Baleno. They have got it all wrong, absolutely wrong!

And as I conclude this blog, thanks to some surfing about the car, I have just realized that according to the manufacturers, Kizashi literally means ‘a prelude to good things’... Truly ironic?


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