Maruti Suzuki in Indian Premium Car Segment

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  • Topic: Maruti Suzuki, Suzuki, Automobile industry in India
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  • Published : November 14, 2012
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MARUTI SUZUKI & INDIAN PREMIUM CAR SEGMENT

Interim Report - Marketing Management

INTRODUCTION:
Indian automobile industry currently contributes 5% to India’s current GDP of $1.4 trillion. The projected size in 2016 of the Indian automotive industry varies between $ 122 billion and $ 159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards India’s GDP by 2016, which is more than double the current contribution. We can safely assume the passenger car market as a whole grows in the same phase if not more than mentioned above. Passenger cars have sub classifications with in them and they are as follows: SEGMENTATION OF INDIAN CAR MARKET:

As per SIAM (Society of Indian Automobile Manufacturers)
The classification of segments are done as per length of the vehicle, (Passenger car segment) 1. A1 - Mini - Up to 3400mm (M800, Nano)
2. A2 - Compact - 3401 to 4000mm (Alto, wagon r, Zen,i10,A-star,Swift,i20,palio,indica etc) 3. A3 - Midsize - 4001 to 4500mm (City,Sx4,Dzire,Logan,Accent,Fiesta,Verna etc) 4. A4 - Executive - 4501 to 4700mm (Corolla,civic,C class,Optra,Octavia, etc) 5. A5 - Premium - 4701 to 5000mm (Camry,Eclass,Accord,Sonata,Laura,Superb,etc) 6. A6 - Luxury - Above 5000mm (S class,5 series etc)

7. B1 - Van - Omni, Versa, Magic etc
8. B2 - MUV/MPV - Innova, Tavera, Sumo etc
9. SUV - CRV, Vitara etc
A segment, B segment etc. were used earlier. But now the segmentation in India is done on the basis of length. Maruti Suzuki India Limited, the leading passenger cars producer, currently holds a market share of about 45% in the passenger vehicles segment. The dominant share of the current 45% has primarily come from passenger cars that belong to the Mini/Compact hatchback or midsize sedan. As Maruti Suzuki started its operations in 1981 the needs of the country’s automotive industries were affordable/entry level cars which Maruti very successfully catered to. But very recently the executive, premium and luxury segment cars are growing more than 20% every year which is higher than the growth of the compact passenger cars. Here is a data which reiterates the growth of premium segment cars in India. The data shows the number of cars whose price is in the range of 15lakh to 30 lakh.

Model| 2004/05| 2006| 2007-08| 2008| 2009| 2010| 2011| Skoda superb| Na| 769| 586| 694| 541| 2078| |
BMW 3 series| -| -| 946| 1,075 (FY09)| 1,155| 2,220 (Jan-Nov)| | Audi A4| -| -| 102| 1,050| 1,658| 3,003| 4,210 (Q1-Q3)| Mercedes c class| 785| 883| 1,127| 1,765| 1,607| 5,109 ( Jan-Nov)| 3,233 (Jan-May)|

The above data clearly shows there is a strong growth in the premium segment that is being seen in the Indian passenger segment. So how far can Maruti Suzuki, a pioneer in small car segment, address the changing trends of Indian car market. Can it replicate the success of small car sales in to the premium segment also? In order to identify the needs and the values of the luxury class and their views and expectations on Maruti entering premium car segment we conducted the following interviews which are given below INTERVIEWS WITH POTENTIAL CUSTOMERS:

INTERVIEW 1:
What is your profile?
I am Prakhar Sharma. I am an electronics engineer and had been working for BEL for the last one year. At present I am a student in IIM Bangalore. Do you own a sedan? If yes, which car?
My father would be the rightful owner of the cars that we possess. He is a Government officer. We currently own a SX4 petrol version. It is the ‘fully loaded’ petrol version, and we own it for over a year. Do you own any other car?

We do own a Maruti 800, which is around 20 years old. Apart from that, my father has his office car as well. We thought about buying a new car because the Maruti 800 was very old. What are the various factors you considered before you bought the car? Generally when a person is looking to buy a sedan, it is his...
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