Maruti Suzuki’s newly launched SUV, Grand Vitara, with a price range of Rs 10.45-19.65 lakh (ex-showroom), is the most expensive vehicle from the company’s stable.
As the country’s largest passenger vehicle manufacturer moves up the value chain, trying to shed its image as a manufacturer of budget cars, the question once again arises whether it will be able to pull it off, especially at a time when car lovers have a range of expensive, premium models to choose from.
To be fair, the new Grand Vitara has received 57,000 bookings even before its price was announced. However, the question is after the euphoria of pre-bookings dies, will consumer interest sustain?
In the past, Maruti’s premium vehicles have not been successful. For instance, in 2003, it launched an SUV that was more expensive than the price of all its hatchbacks put together. The Grand Vitara XL-7 (Rs 16.08 lakh to Rs 17.41 lakh, ex-showroom) was priced closer to a Mercedes-Benz (the C-Class that time cost Rs 20 lakh).
Imported as a completely built-up (CBU) unit, the Grand Vitara XL-7 didn’t find buyers. In four years, the carmaker could sell only 335 units.
In 2007, the carmaker launched the new-generation of the SUV, this time called the Grand Vitara. But it could sell only 1,291 units and discontinued it in 2013.
In 2011, it drove in the Kizashi as a CBU import, a luxury sedan priced Rs 16.5 lakh. But by end-2012 its imports were stopped, with sales of just 784 units.
A Delhi-based Maruti Suzuki dealer told FE there was a perception in the market that customers don’t put money on high-value Maruti cars. “This got reflected in Ciaz, which was launched with much fanfare, notched good numbers initially, but couldn’t outsell rivals like Honda City and Hyundai Verna,” he said.
However, Shashank Srivastava, senior executive officer, marketing & sales, Maruti Suzuki India, counters. He said that Maruti understands consumer needs and is gradually rising up the value chain.
“In the 1990s, when we had the Maruti 800 priced Rs 1.6 lakh and the Zen was launched at Rs 3.4 lakh, people said why would anybody buy the Zen. But it was a runaway success because the market requirement was of a more advanced car with more space and more powerful engine,” he said. “When we launched the Esteem, people said Maruti is a hatchback car company and how can it sell a sedan, but the Esteem outsold Daewoo Cielo.”
Similarly, in 2005, Maruti Suzuki launched the Swift. “That time, people said how can Maruti sell a premium hatch, but we proved everyone wrong, as we did with the Swift Dzire,” Srivastava said. “Later, we entered the MPV segment by launching the Ertiga, and people asked how can Maruti crack the MPV segment? Today, we have 60% market share in MPVs.”
But the biggest challenge for Maruti was Nexa, a new premium car sales channel. “People said Maruti isn’t associated with ‘aspiration’, but today if Nexa were a standalone car company, it would be India’s third largest,” said Srivastava. “What I mean is that we have been offering what consumers want.”