With a trendy blue signature design element, the country’s largest carmaker Maruti Suzuki is all set to roll out its Arena brand of showrooms for mass-market offerings, thereby aligning itself with changing customer preferences. The new showrooms will replace the existing ones in the next three years. Moreover, some major changes have been initiated to transform the True Value dealerships as well. RS Kalsi, Executive Director, Sales and Marketing., Maruti Suzuki, in an interview with FE’s Malyaban Ghosh, said that as market leader, this disruption was required for the company to stay relevant. Also, this move would help shore up dealer profitability. Edited excerpts:
At a time when Maruti has cornered 50% of the market, why did you decide to revamp the existing mass market and True Value channels?
Over the last few years, India has witnessed rapid demographic and technological shifts. Taking a cue from Nexa, we have seen that customers who come to our existing channels also need a similar experience. Customers in both the dealerships are internet-savvy and should have a seamless online to on-site experience. That’s why we decided to change the existing dealerships.
As a market leader, this is sometimes the price we pay. The responsibility increases when you do not have any competition and one has to get into the innovation mode and disrupt the existing practices. This disruption is for the customer and we have to stay relevant even if the the customers are happy.
Is this a continuation of the Nexa project?
Arena will be as premium as Nexa and high-end products like the Vitara Brezza and the Dzire will be available from the existing channels.
The majority of the customers coming to the existing channels are first-time car buyers, while the Nexa customers are discerning and want an exclusive experience. There are major differences in personality traits.
What will be the likely impact of this move on the overall volumes?
We will be able to convert a minimum of 80 existing channels to Arena this fiscal, and in the next three years, every showroom will be transformed. Of course, volumes will come and there will not be any disruption on our volumes. We are very clear that it is a dealer-centric activity and there is a separate division that will be working on it.
How did you convince the dealers to make the required investments, especially just two years after Nexa was launched?
The entire investment will be dealer-centric and the changes have to be made when the showroom will be running. That makes the cost a little bit higher. So the expenditure will be around Rs 1 crore to Rs 1.5 crore because dealerships are of different shapes and one has to engage the architects to change the layout, since the infrastructure and the design will change completely. We think dealers are our partners and first customers. Hence, we are always careful about dealer profitability before launching a new project.