Maruti has set up ‘crack teams’ to drive out rivals Honda and Toyota from the Indian mid-size car segment

The undisputed champion in small-car market, Maruti Suzuki India, is leaving no stone unturned to pierce mid-size and premium vehicles segment. For this, it is putting a new independent management structure and dealership in place to sell bigger cars, price between Rs 9 lakh and 10 lakh or above.

The mid-size segment is currently dominated by Japanese rivals Honda Motor and Toyota Motor and Maruti, which makes one in every two cars sold in India, is making more concerted efforts to enter the segment.

Even though the company made many attempts in the past, it could not achieve much success. Maruti’s newest offering in the mid-size range, Ciaz, saw decent demand but it had to discontinue selling the Kizashi, a premium sedan it brought to India a few years ago, as it found very few buyers.

As per reports by the Economic Times, merely 1-3% of Maruti's vehicle sales currently come from vehicles priced above Rs 10 lakh.
Now, a fresh team, internally named NEXA, will aim at offering a different experience to customers.

Partho Banerjee, Maruti's new Vice President for sales and dealer network, will head NEXA who will be supported by two zonal heads and eight regional heads.

"Every year, our company reflects on the roadmap it intends to take. This new structure was decided last week by the company," a Maruti executive told ET.

He added that just like Toyota has Lexus and Nissan has Infiniti as their luxury brands, Maruti Suzuki would have NEXA as its premium brand for vehicles priced above Rs 10 lakh.

However, a Maruti spokesman declined to comment on "an internal company matter" but as per people once the new channel comes in, existing dealerships will not be able to sell cars which are priced above Rs 10 lakh.

However, the present dealers have been given an option to open new NEXA outlets and Maruti is mulling to have at least 100 such outlets in the first 12-18 months, before expanding into the interiors of the country. Maruti presently has around 1,500 outlets.

Meanwhile, the new outlets are likely to sell the upcoming crossover, globally called the S Cross, as well as 7-seater multipurpose and sport-utility vehicles Maruti plans to launch post-2018, people in the know told the financial daily.

It is likely that Maruti may bring back Kizashi.

"The company is likely to test the waters with the S Cross ... there are other models in the pipeline, which could be sold through these outlets, but they will depend on how the premium outlet model evolves," said one of people in the know.

Gaurav Vangaal, senior analyst at IHS Automotive, said the move pointed at Maruti and Japanese parent Suzuki Motor’s aspiration to move towards the premium segment.

"This is a bold move on part of Maruti Suzuki to transition to a higher level. The initial response to the Ciaz shows that there are takers for Maruti Suzuki in Rs 10 lakh range ...Having said that, it will be a challenging task for Maruti Suzuki to sustain this imagery over Rs 10 lakh,” he told ET.

Another person who closely tracks the company said Maruti and its dealers may invest in personnel and training and the dealerships may have to hire executives from the hospitality or aviation industry for the NEXA outlets, to give different experience to customers.

(Image: Reuters)