Maruti: Revving up for the next phase

It has been two months since  R S Kalsi took to over as Executive Director (Marketing & Sales) at India’s largest car manufacturer, Maruti Suzuki India (MSI), following the sudden departure of Mayank Pareek from the post of marketing head. 

A mechanical engineer by qualification, Kalsi has been an old hand at Maruti, being on board since 1984 (roughly a year after the legendary Maruti 800 was launched), in areas as varied as vendor development, supply chain, parts inspection and engineering. In his current role, he will be in charge of the crucial international marketing division for the company.

R S Kalsi reveals the agenda behind his new role, and the way forward in an interview with Deccan Herald’s Hrithik Kiran Bagade and Umesh M Avvannavar.      
Excerpts:

You took over as MSI’s marketing and sales head recently, after Mayank Pareek left the company. What agenda have you set for yourself in the new role?

It is teamwork and continuity which is the strength of our organisation. We have a robust bandwidth of management teams in all business areas.

On the agenda front, Maruti Suzuki is one of India’s most loved brands.

Nearly 14 million Maruti Suzuki cars ply on Indian roads.
There is a huge network of partners and business associates with us… We are performing well, better than the industry.

The future is exciting, with our medium-term goal of 2 million annual sales, new products and new segments. 

My agenda is to lead the Marketing & Sales team towards achieving the company’s goals, with a strong focus on creating customer delight, both in the areas of products and the aftersales service. 

To achieve this, we would renew focus on our sales network to support 2 million sales.

The focus would include developing network and increasing reach for customer opportunities.

We would also aspire for high-quality customer experience, while urging the sales team to try innovative sales formats.

While we focus on the customer, we would also ensure profitability and growth of our dealer partners. 

We will look at deeper customer engagement opportunities to understand and anticipate their needs, developing capabilities of my team to deliver on these fronts.

I feel that my experience in the field, as Commercial Business Head and National Sales Head, will be of value here. All in all, I think a deep sense of responsibility is what I feel. 
How has 2014 been for Maruti Suzuki? The second half has been eventful with the launch of Ciaz, apart from the upgraded models of Swift and Alto K10.

Can you share some thoughts on customer demand?

Yes, it has been an interesting year so far. We have launched three models with superior fuel efficiency — Ciaz, new Swift and new Alto K-10. All of them return best-in-class fuel efficiency.

In terms of sales, H1 has been good. In the year till date (April-October 2014), MSIL could grow 12 per cent by focusing on all models, exchange schemes, alternate fuel vehicles (CNG) and sales promotions.

Importantly, low base in the previous year and early start of the festive season, this year, also contributed to the sales.

Industry, however, grew only by 2.3 per cent (competition sales are down 4.6 per cent).

However, going forward, in H2, the base will increase, and maintaining growth at a similar rate would be a challenge. For the full year fiscal 2015, we continue with our earlier estimate of double-digit growth. The challenge is before the industry and the customer continues to be cautious.
Why do you think Ciaz will succeed? What kind of bookings have you seen so far? What is your sales target for the car and how has consumer uptake fared?

Ciaz is already a winner in its segment. We have over 21,000 bookings in place.

Ciaz has been designed keeping in mind the aspirations of a midsize premium sedan customer.

A complete package, the Ciaz offers European styling, premium rich interiors and a host of upmarket features.

Ciaz Diesel is India’s most fuel-efficient car. The designers have paid special attention to ensure space, comfort and convenience for rear seat occupants as well.

With Ciaz, we are confident of gaining leadership position in the A3(+) segment, retaining the dominance in the A3(–) with our bestseller, Dzire.

Together, Ciaz and DZire will help us strengthen our overall presence in the A3 segment.

It is seen as a natural upgrade for customers looking for a large sedan in the Maruti Suzuki portfolio.
What is Maruti’s rural growth strategy? How are urban markets faring as compared to rural growth?

In fiscal 2013-14, over 31 per cent contribution to national sales came from rural areas.

Rural sales grew 39 per cent over the previous year and penetration into rural regions stood at 35 per cent.

Urban markets are also a big chunk of our sales. Top 10 cities have grown by 10 per cent during H1.  

We think new model launches, focus on exchange sales and alternate fuels will help maintain momentum, going forward.
How do you plan to market the new Alto K10, especially, as there is not much price difference between the car and Celerio?

For an entry segment buyer, the price difference of Rs 40,000 is quite steep. Any cannibalisation appears quite unlikely.

Both Celerio and Alto K-10 are distinct products, priced apart and targeted at two different sets of customers. 
With the market getting competitive with newer products, how do you plan to sustain your market share (around 45 per cent)?

Our focus will be on expanding product portfolio, bringing in new technologies and expanding our network.

Early this year, Suzuki outlined a strategy to bring 14 new models over the next 4-5 years.

There is a market of 29 per cent for compact SUVs which, so far, Maruti has not entered. So, we will be entering that segment next year. 

Our R&D centre in Rohtak (Haryana) will support and supplement us in terms of faster rollout of products because our overall testing cycle will reduce.