Is Nexa a smart move on Maruti’s part?
Nexa – Maruti Suzuki
The internet is currently going gaga over Maruti Suzuki’s decision to come up with a whole new chain of premium showrooms and dealerships under the banner of a premium umbrella, i.e. NEXA. As per Maruti Suzuki’s announcement, the company is looking at developing approximately 100 exclusive NEXA outlets and showrooms across India by the end of the financial year according to senior officials and company heads. This is a premium sales channel from Maruti Suzuki India Limited and will delve deeper beyond selling only high budget and luxury vehicles with a view towards eventual transformation of the company from a maker of budget cars to a major player in the premium car market in the country according to Senior Vice President (New Channel) Marketing and Sales, Maruti Suzuki, Mr. Partho Banerjee who is spearheading the initiative on behalf of the automobile giant.
Will the NEXA work? This is the question most automobile experts and market watchers seem to be asking currently. Most take an optimistic view to things while many talk about Maruti’s past failures in terms of successfully breaking into luxury markets in the country where it is still perceived as a budget solution across all segments. The NEXA proved to be the launching pad for the unveiling of the premium and luxurious crossover vehicle called the S-Cross which bears introductory price tags between INR 8.34 and 14.37 lakh on an average as per ex showroom figures in Kolkata. Indeed, the price tags for a crossover are a little higher than what you would expect from Maruti Suzuki though the car itself feels premium and not quite like a budget offering in a higher segment as is normally the case with the cars sold by the company.
According to Mr. Banerjee, NEXA will offer supreme hospitality to customers exclusively from the house of Maruti Suzuki. There are a total of 35 NEXA Premium Showrooms which are already active and operational in various Indian cities while the numbers will be scaled up to more than 100 by the end of the financial year as mentioned earlier. As for Kolkata, it only has a solitary NEXA showroom at Chetla while Park Street will also be receiving a showroom quite soon. Maruti Suzuki India Limited has also recruited approximately 1100 relationship managers for managing these showrooms and this hints at premium service. Customers will only need to talk to their relationship managers for solving all their problems and taking care of their specific requirements. Customers are set to be pampered with the all new digital experiences offered at NEXA showrooms according to company sources.
The S Cross is a major move by the company in present times and will come only with diesel engines of 1.3 and 1.6 litres respectively. The former model will be priced within INR 8.82 and 11.30 lakh while the latter will be priced between INR 12.57 and 14.37 lakh as per estimates. The S-Cross, being the first ever car to be sold under the NEXA umbrella will definitely be a turning point in the history of Maruti Suzuki if this initiative is a hit! Various new premium models from Maruti Suzuki will be added to the NEXA channel as part of the company’s targets of 2 million in annual sales volumes by the year 2020.
With the launch of the NEXA showrooms, Maruti Suzuki India Limited is attempting to scale up its overall reach in the market and carve out a point of appeal for high net worth customers who may not be looking at the brand for their premium acquisitions. This is one of the major drivers behind the decision to set up NEXA sales channels on a pan Indian basis at the very outset. The company is now looking at a rebranding exercise to establish itself as a manufacturer of premium, high quality automobiles. NEXA will offer fabulous hospitality to customers and the company aims at scaling up its 45% market share in India with a view towards capturing a higher percentage in premium and luxury segments. The company will first establish showrooms in the top 20 cities in the country and will then scale this network to 40 cities in all. The dealerships of the NEXA showrooms will be offered to existing Maruti Suzuki dealers, 1, 650 of whom are at present associated with the company. Showroom investments will be done by dealers but they will have to offer the entire portfolio of premium cars. A compact SUV may also be launched through the NEXA channel soon.
However, according to most experts and automobile market reports, Maruti Suzuki may not have a winner on its hands with the S-Cross as it is priced a little higher than the features and design on offer. This will not change irrespective of the fact that it is being used to position the NEXA as a premium sales channel for the company. However, there is no denying the fact that this is indeed a unique concept by Maruti Suzuki, i.e. possessing two dealership networks for one parent brand. NEXA is completely different from the new brands created by Nissan and Toyota to meet premium requirements. It will have the same badge on its products but positioning will be more premium, something that customers do not quite associate with Maruti Suzuki India Limited.
However, one cannot deny that the badge has a carefully tailored value of its own, one that has not really changed in recent times. Maruti Suzuki Car is something audiences will find hard to digest even though the company is taking all the steps to position the S-Cross and subsequent vehicles as luxury propositions. The Kizashi is a case in point where the product was fabulous but did not find too many takers owing to lack of brand value for Maruti in the luxury segment. Maruti Suzuki is a little ambitious with the NEXA premium sales channel and automobile enthusiasts ardently hope that works as India’s much loved brand gives itself a new and luxurious avatar!