Invicto is Maruti Suzuki’s big premiumisation leap. Will it be able to reinvent itself?

0
Think of Maruti and you think of a small, workhorse car that endures and needs little maintenance. Maruti Suzuki India Ltd became India’s biggest car maker riding high on that image. But what remained a boon for decades started to look like a curse later. The market and the customer preferences changed so much in the past few years that the company had to break out of its image to retain its position as India’s biggest car maker.

In a new market, Maruti Suzuki is in a rush to reinvent itself. Small cars are selling less as they are more difficult to make as well as offer little scope of growing profits. With rising disposable incomes and a demand for experience, Indians are dumping the hatchbacks and climbing into premium vehicles, the SUVs and the MPVs. Four out of every ten passenger vehicles now sold in India are these premium vehicles. Demand for such vehicles has trebled in the three years to March 2023. The market landscape has shifted radically for Maruti Suzuki where it needs more premium sets of wheels to keep zooming ahead.

Maruti’ Suzuki’s latest offering, Invicto, is a big leap into the premium segment. Brezza, which had heralded its entry into the segment in 2016, was a runaway success. The company built on that success and went on to create NEXA, a premium sales channel which includes Grand Vitara, Fronx, Jimny and XL6. Invicto, of course, bulges up Nexa, but it also drives Maruti Suzuki into an entirely new territory — the above-Rs 20 lakh segment. It puts the company in the premium three-row segment, has a 7-seater model starting from Rs 24.79 lakh and an 8-seater model from Rs 24.84 lakh.

Invicto comes burdened with a lot of expectation. It shows Maruti Suzuki’s resolve to reinvent itself from a maker of small cars to a premium brand that has arrived.

The race in the SUV segment
In 2006, the government started incentivising the production of cars with a length of less than four metres to encourage car ownership. That flooded the Indian market with small cars of all kinds. It became a crowded market segment where generating profits became hard, and some car makers even exited the market. Then India started changing. Rising incomes and India’s middle class getting adventurous made people prefer SUVs to hatchbacks.

Sales of SUVs and MPVs exceeding four metres in length now make up at least 10% in volume terms even at compact-car makers such as Maruti Suzuki. The share of sub-four metre compact vehicles, which though they get tax incentives, has shrunk six percentage points in three years to 72%. By contrast, premium vehicles — usually large-sized SUVs and MPVs exceeding 4,500 mm in length — now account for 11% of the industry, up from 6% three years ago. The 4-4.5 metre passenger vehicle segment has seen its share stagnate at 16-17%.

In the days of small car explosion, the above-four metre segment was dominated by the likes of Mercedes, BMW, Jaguar-Land Rover and Audi. Now desi car makers Tata Motors and Mahindra & Mahindra dominate the SUV space with aggressive product and powertrain interventions over the last couple of years. Tata Motors, with nearly 30% market share, leads this segment.

A new road for Maruti
Maruti Suzuki competes with Tata Motors, Mahindra & Mahindra and Hyundai Motor India for the top slot in the SUV space. The company’s market share in the non-SUV segment stood at around 65 per cent but due to low penetration in the SUV segment, its overall market share has gone below 45 per cent. But the company is racing full throttle to grow its SUV sales, and it has been successful to an extent. Its SUV market share stood at 10.5 per cent in 2021-22 and increased to 13 per cent last fiscal.

In the first quarter of this fiscal year, the share of SUVs in Maruti Suzuki’s sales volume has nearly doubled, boosted by strong demand for the Brezza, Grand Vitara, Fronx and Jimny, all launched in the past one year. While the share of SUVs in its sales rose to 22.4% in the first quarter from 12.6% a year earlier, that of small cars, for long its bread and butter, fell to 53.2% from 58.8%.

Maruti Suzuki is planning to double its SUV sales in the current financial year and push its market share to more than 25 per cent. It had sold 2.02 lakh SUVs in the last financial year with a market share of nearly 13 per cent. However, in FY24, the company aims to sell around 5 lakh units. Doubling of the market share in the SUV segment is crucial for the company if it has to again surpass the 50 per cent market share mark in the domestic passenger vehicle industry.

The makeover moment
Invicto poses a unique challenge for Maruti Suzuki. For the first time, the company is parking itself in a really premium segment where customers are more demanding than in the below-Rs 20 lakh segment. And, most importantly, the image matters here.

Invicto will be competing with many of the Rs 20 lakh-to-Rs 30 lakh cars such as Mahindra Scorpio N, Toyota Innova Hycross, Jeep Meridian, MG Hector Plus, Toyota Innova Crysta, Hyundai Tucson and Tata Harrier. To sell a car in the above-Rs 20 lakh segment, an entirely new territory for Maruti Suzuki, it would need to not only deliver competitive luxury as well as performance, it will also have to convince the customer that it’s not merely the king of compact cars. Its Nexa sales channel which focuses on premium models has been a smart reinvention strategy.

In the past few years, Maruti Suzuki has successfully projected itself as an SUV maker. Now it has to go a step further. If Invicto succeeds, it will be a landmark for the company, for that will firmly establish it as a premium car maker.

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Automobiles News Click Here 

Read original article here

Denial of responsibility! Rapidtelecast.com is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
Leave a comment