Debate: Is it End of the Road For Maruti Suzuki Dominance?

[CORTINA]

With the impeding launch of Hyundai Eon and continued labour problems in Gurgoan is it the end of road for MSIL dominance?

Before I jump into conclusion let us see what went wrong?
1. Products - the products that made Maruti once king have let it down miserably- It has been nearly 28 years - yet MSIL never has launched a product of its own it has just plucked a model from vast stable of its parent company and sold it here - a case being New Swift

2.Not in sync with market dynamics - Gone our days when people buy a car for transportation only - The 1970 - 1980 baby boomers and their young family requirement have changed - want quality interiors , aspirational value , luggage space, equipment and space - which is why a a product like i20 sells as much as 8000 units a month despite underpowered engines and so many problems.

3.Quality interiors - Being king of J D power does not matter if you can't provide quality interiors at a decent price - MSIL stop providing cheap quality

4.Lack of market research and product development -
A case being - Estilo which was branded as Zen so to attract Zen customers towards an old boxy defunct model
A- star - If maruti had launched Japanese A- star( aka Alto ) it would have sold much more.
Alto - despite being 11 year old design MSIL has been in a slumber with no constant development and no replacement in sight - MSIL has lost a golden opportunity here.
Still no diesel in small car segment like Beat Diesel
Unnecessary distraction - Launch of Kizashi , Vitara , - these products should have been launched as separate brand like Acura by Honda and not as Suzuki if it had to been launched plus quality should have been improved.

5.Too many products - MSIL small portfolio is filled with too many products many of them competing with each other - Estilo , Wagon R , A- star are fighting fo same customers rather than their counterparts.same can be said about Ritz and Swift.
6.Not using cash surplus - MSIL has lot of cash surplus which it does not want to use for R&D in India - if a part of it had been used it would benefited the company

7.Indians getting tired of MSIL - 28 years is long time and people are getting tired of MSIL - a case being many people in Swift segment buy other cars not because more VFM than Swift but want to look different from Herd - for this there is no solution here but create a new premium brands and too many options .

Is it the end of road for MSIL dominace - yes and no - yes market share will fall but MSIL will still maintain leadership because the small car segment development costs too much money and rewards are uncertain. and cost of replacing it with new products is all together a new story.Suzuki has always responded well too changing market dynamics whether at the turn of millennium or now and its biggest USP is small car development which even VW lacks - thats why all its new cars are built on old paltforms which are just modified - VW Polo and Fabia being a case in point.
So what are other people views?

 

[jalex]

Re: Debate: Is it the end of road for MSIL dominance"?

MSIL is reducing the quality on its cars and its appalling. Most cars they roll out today are prone to rust very early in life and there are many gremlins present in the new cars. This coupled with labour issues at the plants will probably end them.

 

[Surfer]

Re: Debate: Is it the end of road for MSIL dominance"?

End of road for MSIL dominance? - NO - may be its a long term process - its just binging

Maruti still holds 50+% of market share. Also India is one of the fastest growing car market.Day by day need for cars will be increased and which will help them to keep their share.

1. Products: Still there are many people in india who buy a car for transportation. First car is always a special for everyone. And most of them dont want to take risk in this. Those who consider maruti are looking for a total VFM package.They dont want to take risks. What a India buyre is looking for ? A low cost product with decent quality.
Money is the most important factor here that's way we see Hatchback are sold mostly. people want car with low cost, high fuel economy, low maintenance, good ass, good resale. And in all these departments Maruti is still king. They have right products which fulfills all the above needs.

2. Not in sync with market dynamics - I agree that demand from customers is increased a lot. But other manufactures give nice product with lot of features (i10,polo,fabia)but still all those are quite expensive or got some basic issues. What Maruti has managed is to make the balance here.

3. Quality interiors - I agree on this but now you can see much improvement on this (new swift). They were providing cheap quality interiors simply because there was no competition and
we have to accept it. Now they have to change this and looks like they are changing.

4. Lack of market research and product development - Estilo and Astar - still sells more than 2k+ units (OK IMO). Now consider the competitors - how much they are selling ? (Beat - 2k, spark 3k, indica - 1k) Only santro sales better than this in this segment.
Alto -What is k10 then? Have you driven any k10 ? it is better than old gen Zen. They are managed to sell old alto also as its entry level product with no competition. Yes but after Eon
sure we will see some changes. (rumors new 800 coming by 2012 bigger than current alto)
Kizashi , Vitara - I agree with you these are total failure.

5.Too many products - [products many of them competing with each other] What is wrong in this ? Think from company perspective - They have
800,Omni,Alto - 3 choices
k10,Astar,Estilo,WaganR,Eeco - 5 choices
Ritz,Swift - 2 choices
Now who wins - Maruti - although the competition is there but finally people are purchasing their car only then why they should worry?

6.Not using cash surplus : Partially agree but they are spending money on global scale.The product we see in global market are actually same in indian market (although with some low quality) but all other manufactures also do the same.

7.Indians getting tired of MSIL - I dont think so - One will simply try to buy the car which is perfect and fulfills as many aspects. Currently Maruti is giving what customers want hence people prefer them. If in coming future other companies are fulfilling requirements obviously they will choose other cars.

MSIL will still dominate Indian market but yes we will see a lot of drop in their sale in coming years.
Competition is always good as it benefits the customers only. And upcoming competition will sure help us.

 

[P3T3R]

Re: Debate: Is it the end of road for MSIL dominance"?

I definitely think so. People bought a Maruti because it was fuel efficient, cheap to buy, easy and cheap to maintain, and good quality (compared to Amby & Padmini). Maruti's are no longer as fuel efficient as they used to be, maintainence costs are the same as or more than others, you can't go to a roadside mechanic anymore (thanks to MPFI) and compared to the competetion the build quality is pathetic. Also the much talked about A.S.S. is not any better than the competition. I had a bad experience. I will be good for the customer is their dominance ends. They will have to stop taking us for a ride.

 

[Umang]

Re: Debate: Is it the end of road for MSIL dominance"?

well i will say every dog has its day!!

 

[AMIT AGARWAL]

Re: Debate: Is it the end of road for MSIL dominance"?

Exactly, I think in few years down the line Maruti might feel the pinch. Seriously, Maruti doesn't have a nice proper sedan right now if u put aside DZIRE (I don't think SX4 sells a lot correct me if I am wrong). Suppose a person want to spend 10L on his/her new car Maruti doesn't have an option but on the other hands big companies like VW Honda Nissan Hyundai they making a varieties of car and their product range start from 3-4L and goes upto 20-25L.

I am not saying Maruti didn' try but they failed and they failed miserably. They came out with Vitara and Kizashi and both flopped in their segments. I personally loved Kizashi but haven't seen even couple of Kizashi on road while on the other hand Honda Accord and Skoda Superb are of the same category and they doing pretty good. People don't consider MARUTI SUZUKI as premium company and nor their cars have that premium feel in them. Maruti tries to sell their cars at low cost by cutting down the basic features see in the case of New Swift Vdi this car doesn't even come with ABS and factory fitted Music System. If Maruti really want to be car leader in our country they seriously need to come out with some premium car or else we might see a new leader in few years, I won't be shocked if in 5 years Hyundai is replaced as highest car selling company.

 

[350Z]

Re: Debate: Is it the end of road for MSIL dominance"?

With the impeding launch of Hyundai Eon and continued labour problems in Gurgoan is it the end of road for MSIL dominance?

There is no definite answer to this question and it will be too early to comment. Their USP has always been the cars in smaller segment. It is just the beginning of other manufacturers to step and compete into their territory and vice versa. If it comes to buy a new small car, Maruti Suzuki still is the brand which immediately clicks to a buyer primarily due the trust, reliability and widespread network. Eventually more manufacturers are bringing their small cars because they have realized that this segment has a really good potential for sales but it does not at all translates that Maruti Suzuki is unaware of this fact. Don’t forget, Maruti Suzuki has already announced the plans to launch 20 models within next 5 years. And I think itself says a lot about their seriousness for the market. (Link: http://www.theautomotiveindia.com/f...4-maruti-suzuki-launch-20-models-5-years.html)

It has been nearly 28 years - yet MSIL never has launched a product of its own it has just plucked a model from vast stable of its parent company and sold it here - a case being New Swift

I think it’s important to understand that “Maruti” alone is nothing. The company originally is a subsidiary of Suzuki Corporation. How and why would you expect Maruti to manufacture a product of its “own”?

Still no diesel in small car segment like Beat Diesel

Maruti Suzuki Ritz Diesel?

MSIL small portfolio is filled with too many products many of them competing with each other - Estilo , Wagon R , A- star are fighting fo same customers rather than their counterparts.same can be said about Ritz and Swift.

Either ways, it’s good for them. With most of the cars in this segment belonging to them, the probability of their sales certainly increases.

6.Not using cash surplus - MSIL has lot of cash surplus which it does not want to use for R&D in India - if a part of it had been used it would benefited the company

Rome wasn’t built in a day. And if they didn’t invested in research and development, the company won’t have been holding most of the shares in the market today.

7.Indians getting tired of MSIL - 28 years is long time and people are getting tired of MSIL - a case being many people in Swift segment buy other cars not because more VFM than Swift but want to look different from Herd - for this there is no solution here but create a new premium brands and too many options .

This statement could not be further from truth. While a few may want to own something different from the crowd but the fact is that majority is not concerned over it. Moreover, there are too many brands and models which have been serving since decades. Have people got tired of them?

Drive Safe,
350Z

 

[cooldhaya]

Re: Debate: Is it the end of road for MSIL dominance"?

End of dominance- Probably NO! There are still people out there in the market who prefer a Maruti more than any other brand. Maruti has created a a very deep image that their cars are fuel-efficient , cheap to maintain and reliable in the long run , its hard to shake that off a common man's mind.

 

['venom']

Re: Debate: Is it the end of road for MSIL dominance"?

Hi, I also dont think its end of road for MSIL. Their quality of cars is improving now.

 

[P3T3R]

Re: Debate: Is it the end of road for MSIL dominance"?

Any company being dominant is always bad for the customer (at least in India). Maruti is arragant and does not care for it's customers. I have really suffered buying their pathetic car Alto (which most people will disagree) and the pathetic A.S.S. (again most will disagree). It is my personal opinion but I will never buy a Maruti and will always wish the worst for them. I had a major headache owning the car and also lost a lot of money in the bargain. Good that companies like Hyundai and Tata are giving them competition. I hope this will bring them to their feet and in the bargain we the customers benifit.

 

[Figoian]

Re: Debate: Is it the end of road for MSIL dominance"?

Good thread. We can expect a healthy debate...

MS has been dominating the industry just because of being Monopoly... And the time when the entered, its only competitors were the Hindustan Ambassador & Premier Padmini were both around 25 years out of date at that point. The companies entered Indian autmobile industry later couldn't sustain or compete with MS for various reasons. One of those may be MS being partnered with "Maruti Udyog Limited"; the former ownership and other political reasons, which are well known.

However, the situation is not the same today... Increasing interest of major International Automobile companies in India, India's own Tata's aggressive moves; people's changing needs and tastes are contributing to the revolution; break the Monopoly and increase the competition. This is undoubtedly a good move.

Here are some of my toughts and counters.

With the impeding launch of Hyundai Eon and continued labour problems in Gurgoan is it the end of road for MSIL dominance?

I wish it to be. Monopoloy isn't anytime good for customers.

well i will say every dog has its day!! :

Exactly. I too wanted to say the same... BTW, as per Business experts, every business will see a peak and down in a cycle of 30 yrs.

Maruti doesn't have a nice proper sedan right now if u put aside DZIRE (I don't think SX4 sells a lot correct me if I am wrong). Suppose a person want to spend 10L on his/her new car Maruti doesn't have an option but on the other hands big companies like VW Honda Nissan Hyundai they making a varieties of car and their product range start from 3-4L and goes upto 20-25L.

100% True.

End of dominance- Probably NO! There are still people out there in the market who prefer a Maruti more than any other brand. Maruti has created a a very deep image that their cars are fuel-efficient , cheap to maintain and reliable in the long run , its hard to shake that off a common man's mind.

Thats probably because of people's mentality. We have 2 set of people, one would go with Prevailing / Dominating in the industry, beleiving that, it should be the best as its widely selling... And the Second Category goes by what they actually want / Or their heart loves... 2nd category will mostly not prefer MS unless it really satisfy their requirements. Thats why, in spite of being expensive, still Hyundai i-20 / VW Polo / Fiat Punto are selling good.

Hi, I also dont think its end of road for MSIL. Their quality of cars is improving now.

Any examples???

Any company being dominant is always bad for the customer (at least in India). Maruti is arragant and does not care for it's customers.

100% acceptable.

 

[Surfer]

IMO MSIL should put Kizashi at 12L and Vitara at 15L and then imagine the sales figures ! [thinking]

 

[dodge_v1per]

IMO MSIL should put Kizashi at 12L and Vitara at 15L and then imagine the sales figures ! [thinking]

this will itself ask lotsa money 'coz both are CBU!!

 

[monkey1]

Maruti-Suzuki is a third rate company and i wish that it loses it's unfair dominance in the Indian auto market. The dealers are arrogant and the a.s.s is a rip-off. If you're in Chennai never buy or service a car from Khivraj Motors. The place is swarming with thugs and they do not understand the concept of customer service. I pray for the day Maruti-Suzuki flops in this market.

 

[P3T3R]

Maruti-Suzuki is a third rate company and i wish that it loses it's unfair dominance in the Indian auto market. The dealers are arrogant and the a.s.s is a rip-off. If you're in Chennai never buy or service a car from Khivraj Motors. The place is swarming with thugs and they do not understand the concept of customer service. I pray for the day Maruti-Suzuki flops in this market.

Can you be a bit more specific about the problems you faced.