NEW DELHI: Maruti Suzuki has bought prime properties in metros to build upmarket showrooms and capture footfalls of cash-rich customers, signalling a sea change in its distribution strategy as competition heats up and market share dwindles. India's largest car-maker spent Rs 50-60 crore each to buy properties in posh locations like Lokhandwala in Mumbai's Andheri and Indraprastha in central Delhi. Places like Lokhandwala have emerged as shopping hot spots, housing glitzy malls and luxury car showrooms.
The company, which plans to buy another 12 properties across metros, built plush outlets in five of its own properties and recently handed them to dealers, departing from its traditional model of outsourcing distribution to private franchisees.
“There was a need to start a retail format that would help us to cushion-in our dealers on the high-retail prices. We spent around Rs 50-60 crore on real estate in Mumbai. This is much beyond the means of local dealers. Hence, we managed to get places in the right locations, while micro issues of sales and service are left to dealers,” said Mayank Pareek, managing executive officer (marketing), Maruti Suzuki.
Maruti Suzuki's lifestyle products such as apparels, sports products, car miniatures, baggage and other branded stuff are also being displayed in the showrooms to provide a premium look.
“We have to offer a different experience to our customers,” said Rajeev Sawhney, owner of the new car gallery at Indraprastha in Delhi. Eventually, the carmaker’s 890 outlets will sport a uniform look, taking a cue from the five premium outlets.
These distribution changes partly stem from its desire to upgrade into a big sedan (separate trunk for the luggage) player. The company's sedan Kizashi, which will hit the market next month with a price band of Rs 14-16 lakh, is pitted against superior brands like Honda Civic, Toyota Corolla and Skoda Laura. The company plans to enter the multi-utility segment, which forms 18% of the market, by launching R3 sometime this year. “We would be catering to a new set of customers with Kizashi. They should have a different perception,” said Pareek.
The company, which plans to buy another 12 properties across metros, built plush outlets in five of its own properties and recently handed them to dealers, departing from its traditional model of outsourcing distribution to private franchisees.
“There was a need to start a retail format that would help us to cushion-in our dealers on the high-retail prices. We spent around Rs 50-60 crore on real estate in Mumbai. This is much beyond the means of local dealers. Hence, we managed to get places in the right locations, while micro issues of sales and service are left to dealers,” said Mayank Pareek, managing executive officer (marketing), Maruti Suzuki.
Maruti Suzuki's lifestyle products such as apparels, sports products, car miniatures, baggage and other branded stuff are also being displayed in the showrooms to provide a premium look.
“We have to offer a different experience to our customers,” said Rajeev Sawhney, owner of the new car gallery at Indraprastha in Delhi. Eventually, the carmaker’s 890 outlets will sport a uniform look, taking a cue from the five premium outlets.
These distribution changes partly stem from its desire to upgrade into a big sedan (separate trunk for the luggage) player. The company's sedan Kizashi, which will hit the market next month with a price band of Rs 14-16 lakh, is pitted against superior brands like Honda Civic, Toyota Corolla and Skoda Laura. The company plans to enter the multi-utility segment, which forms 18% of the market, by launching R3 sometime this year. “We would be catering to a new set of customers with Kizashi. They should have a different perception,” said Pareek.
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