Maruti Suzuki will see its premium dealership channel Nexa contributing around 20-21% to its total sales volume in the domestic market during FY18, up from 15% in FY17. In fact, in March 2017 Maruti had achieved its target of 15% of its total sales volume coming from Nexa three years ahead of schedule. In 2015-16, when the dealership was set up, its contribution to total volumes was 6.9%. Thus far during the year, Nexa outlets sold on average nearly 27,000-28,000 cars every month, of which nearly 15,000-16,000 were Balenos, followed by Ignis, Ciaz, and S-Cross. This means on a monthly basis more cars are retailed from Nexa than the showrooms of Tata Motors, Honda Cars and Mahindra & Mahindra. Had Nexa been a standalone retail showroom, its volumes would have been highest after Maruti and Hyundai.
Maruti’s total volume sales in domestic market during a month ranges between 130,000 and 150,000 units. Analysts have estimated that in value terms, Nexa’s contribution to the company’s top line would be around 28-30% in FY18 compared with 25% in FY17. The first car to be retailed via Nexa was the S-Cross crossover vehicle, which was followed by the premium hatchback Baleno and Ignis, a premium urban compact car priced around Rs 5 lakh launched in January 2017. Maruti had in April 2017 shifted its sedan Ciaz also from its regular showroom to Nexa. Since Ciaz was launched prior to that of Nexa, the car was earlier retailed through its regular dealerships. “Nexa will continue to create new and unique experiences for its customer beyond selling cars, and forge relationships which last beyond car purchases. Nexa is a response to changing customer needs, expectations and aspirations,” said RS Kalsi, senior executive director (marketing & sales), Maruti Suzuki India.
Between April and January 2018, the total domestic sales of Maruti Suzuki stood at 1,359,649 units of which Nexa’s contribution was 270,651 units.
Since cars like the Baleno are priced higher than the entry level, the average realisation to the company on per unit sales is higher than entry-level cars like the Alto and WagonR, which are retailed through the normal dealership channels. Also, since there’s a huge waiting list for the Baleno, Maruti does not offer any discounts on it. There are total of 299 Nexa showrooms covering 171 cities across the country.
By: Rupesh Dutta