7 Reasons Why Maruti-Suzuki is the Market Leader in India....

Every second car in India comes from the stable of Maruti Suzuki. In event of a downturn, where for all the other car manufactures, growth seems to be problem; Maruti tends to show rapid growth year-on-year. In the month of September, the company has shown a 11.7% increase in Y-O-Y (year-on-year) growth & their exports market is also up 29% M-O-M (month-on-month) & an astonishing 181% Y-O-Y. Maruti Suzuki is the undisputed leader for the four wheeler category in India. (Financial data source- moneycontrol) 

How is Maruti Suzuki able to grow every year, whereas its competitors seem to be struggling? Maruti Suzuki has about 40% of four-wheeler market share in the country. There are a number of reasons for its growth. Through this article we have tried to uncover some of them.

Reasons for success

      1.      Efficient distribution— The first principle of economics is that is if you generate demand, you should have the availability of the product to cater to the demand. There are many distribution centres of Maruti within any city in India. Even in the remotest of corner, there will be a Maruti sales outlet. Coupled with the ever increasing service centres for the company, this company seems to have the structure to succeed. Maruti Suzuki has the highest number of service centres across the country. Maruti seems to have an edge over its competitors in this aspect.

2.      Product range- The Company has a large number of products under its basket. Right from the affordable Alto to the high end SX4, the company seems to have it all. The company through its cars like A-Star, wagon R, Swift, & Swift Dzire focuses on the middle class whose purchasing power is rising by the day. Also, the yet to be launched X-Alpha has generated a lot of interest among the auto lovers.

3.      Marketing strategy of cannibalization— In marketing, cannibalization refers to decrease in sales volume or market share of one of the product due to introduction of a new product by the same producer. Maruti-Suzuki believes in the concept of cannibalization. For instance, if the customer’s budget is on a lower side, he or she may purchase an Alto instead of a Wagon-R. Although the volumes of Wagon-R are hit, the sales still remain with Maruti. So Maruti ensures that the customer instead of going to a Tata motors or Hyundai Motors or any of its competitors stays with Maruti-Suzuki

4.      Shift of the co. towards diesel oriented cars— This has been a strategic decision taken by the company. 60% of the cars manufactured by the company are of diesel engines. The variants of Swift, Swift Dzire & SX4 diesel variants are very successful. Petrol in India is now de-controlled. That means that the OMCs like BPCL, IOC & HPCL are free to decide the rates of the petrol based on the rupee-dollar fluctuations. Diesel is not de-controlled as India is a diesel economy. Decontrolling diesel or no govt interference to vary diesel prices has again a direct link with inflation & probably govt vote banks for the 2014 Lok Sabha polls

5.      Focus on rural markets— Currently, about 26% of Maruti’s sales come from the rural India. After the 2009 economic meltdown, Maruti Suzuki started concentrating more on the rural markets. Campaigns like Ghar Ghar Mein Maruti’ and ‘Mera Sapna Meri Maruti’ targeted to the rural India have augured well for the company.

6.      Long Association with India— The company has been associated with the Indian population for more than 40 years. Right from the now defunct in terms of production, but ever popular Maruti 800 to high end vehicles the company seems to have established a strong bond with the Indian population. Younger India in their budding years has travelled a lot in this car with their parents. So they want to take the legacy forward.

7.      Excellent mileage, focussed advertisements concentrating on product features like k-series engine augur well for the company.  Maruti is one of the first companies in India to focus on advertising the engine specifications. i.e. the K-series engine. The advertisements of Maruti Suzuki focuses on Maruti being a value buy.