It's a new show with more room

Last Updated 18 August 2015, 18:40 IST
Why are vehicle manufacturers, including auto leader Maruti Suzuki, bike-maker Honda, and even luxury car giant BMW, planning alternate sales outlets that retail specific models in a specific setting, targeting a particular segment of their customer base?

Price Waterhouse partner and auto expert Abdul Majeed thinks there is a strategy behind the move. “Different kinds of customers demand different kinds of experiences, which existing sales channels cannot easily provide. Accordingly, OEMs (original equipment makers) are trying to develop special, personalised experiences for their clientele,” he said.

Yes, customer tastes are changing, and so is the thirst for new experiences from exclusive, premium, and luxury goods. It is this new trend in consumption, fuelled by a competition to introduce ever-perfect products that sell well, which seems to be the trigger for manufacturers. It’s not just products, what is being offered to customers is an entire experience.

NEXA is the next big thing

India’s largest carmaker Maruti Suzuki India (MSI) has been selling some of the country’s favourite machines in the millions. While it has dabbled with a few premium models (such as the Kizashi) in the past, Maruti has been unable to get its ardent followers to embrace its top-end offerings.

Maruti recently pushed its way once again into the premium segment, launching the crossover S-Cross. The company is extremely bullish towards selling the car well, by which it hopes to have an all-round presence and grow beyond its current market share of 50 per cent.

For the first time, Maruti has launched a new premium sales channel, NEXA, where the S-Cross will be the first car on sale. Through Nexa, the company will go beyond selling cars and create a new format of retail experience for the customer.

“The market in India has been evolving. When we launched in 1983, we set new benchmarks with the 800 and Omni. Then many new models came, and customer tastes also changed. From new products, customers are demanding new experiences; the younger generation, especially, is going for the big ticket decision of buying a premium car,” MSI Executive Director (Marketing and Sales) R S Kalsi told Deccan Herald, when he launched the NEXA concept in Bengaluru.

“The NEXA premium sales channel is a step in the direction of our medium-term goal of two million sales by 2020. The idea behind NEXA is to provide an overall premium experience to the customer, with emphasis on hospitable service, along with integrating technology. Customers are looking for changed experiences,” he added.

The NEXA showroom is designed to display three cars, with a cosy black and white prestige monochromatic theme, lending an ambience that puts the car in the centre. Special attention has been given to in-store lighting, and the entire spotlight is on the car.

“As part of the NEXA hospitality push, around 1,000 relationship managers have been trained to give the customer full attention. Many of them are being hired from sectors like aviation, hospitality, and financial services, expanding the talent pool of the automobile sector,” Kalsi said.

Besides, on the technology front, the relationship managers will be equipped with iPads. Also, a NEXA owner’s app for smartphones will help customers recall service history, emergency support, accessory purchase, event updates, bookings and service requests.
Maruti plans to open nearly 100 NEXA showrooms across India in the next 6-8 months, along with new premium car models.

According to Majeed, “Maruti has been a provider of entry-level cars for a long time, and the NEXA is an indication of a shift from that mindset.”

Through NEXA, Maruti will be able to identify and specifically reach out to a premium patron pool that will relate to its premium image, even as the company continues its mass segment reign.

Flying the new wings

Heralding a new trend in the Indian two-wheeler market, Honda Motorcycles and Scooters India (HMSI) has introduced a separate distribution network in top cities to provide a premium experience to customers for its new high-end offering CBR 650F.

“Wing World is a network of new shop-in-shop customer touch-points, complete with a benchmarked sales-service setup. In Phase-I, the exclusive ‘Wing World’ dealerships span across 12 cities — New Delhi, Bengaluru, Hyderabad, Chennai, Kolkata, Indore, Ahmedabad, Pune, Kochi, Lucknow, Chandigarh and Bhubaneswar. Besides, there are two company-owned Wing Worlds in Mumbai and New Delhi. Going-forward, this will extend to 20 cities in Phase-II by the year end,” HMSI Senior Vice President (Sales and Marketing) Yadvinder Singh Guleria told Deccan Herald.

Priced at Rs. 7.3 lakh (ex-showroom, Delhi), the CBR 650F is a flagship model for Honda from the brand perspective.

“We believe that the fun motorcycling segment is a high potential market. From the business perspective, this model is a first, as we start CKD (completely knocked-down) assembly of high performance bikes with a ‘Make in India’ thrust. Our first objective is to benchmark our manpower skills and manufacturing,” Guleria added. Going forward, Honda plans to push for adding other global higher displacement engine bikes to its India product basket available at Wing Worlds. Similar to Maruti, Honda’s strategy allows it to cater to different types of customers separately.

“While the existing 844 Honda exclusive authorised dealerships’ customers will continue to retail Honda’s domestic line-up of automatic scooters and motorcycles, the elite Wing World will target customers of the mid-luxury segment in India, who are exposed to global trends and want exclusivity,” he said.

The 14 exclusive Wing World outlets will also present customers with a plethora of bike fashion clothing and accessories from Italian lifestyle brand GAS, which has been Honda’s exclusive fashion sponsor for its MotoGP teams since 1998. “The strategy is to woo customers with new products, which is one side of the story, while the other part is to provide a seamless distribution channel, which is also important. The aftermarket also needs to connect with customers differently to give them new experiences,” Majeed said.
Dial ‘M’ for M-Store

Looking at the diversity of the Indian auto industry, even luxury carmakers are exploring parallel sales channels to push specific product sales, and build a particular customer base.

German automobile giant BMW, in a bid to build its brand in India — with focus on performance, dynamics, and aesthetics — has bet big on its M Series portfolio.

The plan seems to be to roll out the new cars, to be sold in new, dedicated outlets called ‘M Store’ to sell M Series cars, the first of which will be opened in Mumbai this year.

“BMW is targeting specific customer profiles. It is all about,  ‘What type of customers should I go after, what products do I give them, and through what channel’,” Majeed said.
The M Series push is part of the company’s product expansion strategy, where it has planned to roll out 15 new cars under the MXI (M Series performance cars, X Series utility vehicles, I Series sustainable cars) push, in India this year.

According to BMW Group India President Philipp von Sahr, “We plan to have a good mix of our cars in India, and are exploring all categories. We continue to focus on the M Series portfolio, in an effort to develop BMW as a brand.”

While BMW has already launched four models (M3 Sedan, M4 Coupe, M5 Sedan, and M6 Gran Coupe) last year, more models from the M Series are planned this year.

 Majeed says that given India’s diversity and varying purchasing power, and with auto companies selling their offerings from entry-level to the high-end, carmakers must come out with innovations on every front, even beyond product development.

“Earlier, cars would be in the centre of a maker’s strategy, but today OEMs are trying to put customers at the centre, and provide them with an overall experience (along with the car).  This drive will help position their brand positively, and also more companies are likely to utilise this approach going forward,” Majeed said.

(Published 18 August 2015, 15:45 IST)

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