Tuesday, September 1, 2009

Itz the magic called Ritz, after many other hitz...


IIPM - Admission Procedure

Maruti Suzuki is upbeat about the semi-urban and rural markets. But it has bigger plans... Shinzo Nakanishi, MD, Maruti Suzuki India, live & exclusive...


4Ps B&M: How is Ritz different from the other models selling under the same segment? Is it BS-IV compliant?
SN:
The Ritz combines modern European design, the sporty feeling of the Swift, the latest in engine technology and Suzuki’s globally acclaimed expertise in compact cars. Ritz further reiterates parent Suzuki Motor Corporation’s commitment to bring global car models with a contemporary design, style and next generation fuel-efficient, environment-friendly engine technology for its customers in India. The Ritz will be made available with the latest K12M engine in the Indian market. With Ritz, Maruti Suzuki has fulfilled the promise of offering at least one new product to the Indian consumer, every year. We now have eight cars in the A2 category including the Ritz. With the Ritz, we are offering a first BS-IV compatible vehicle from Maruti’s stable for the Indian consumer. Moreover, we are launching it much before the guidelines are made mandatory in the country. Globally, the Splash has been an instant hit and we are hoping for a similar response from the Indian market for the Ritz.

4Ps B&M: Don’t you think the Ritz will eat up your own market share in the A2 category. WIll it negatively affect your company by attracting the Swift buyers?
SN:
No, it will rather expand the overall market in the A2 category. This is something that Maruti Suzuki has been doing for a long time now. Like when we launched the new Zen when WagonR was already in the market, some people thought it will not work; but it carved out a new market for itself in the industry. India is a compact car country, yet of a diverse nature where no two consumers think alike. In fact, with Ritz, we wanted to give the consumers a choice within the Maruti Suzuki brands. There is no denying that Ritz has been made on the Swift platform but unlike Swift, Ritz is a family car and is targeted at an altogether different platform. In fact, we believe that there will be no cannibalisation and it will carve a different segment for itself, rather than negatively hammer Swift’s market share.

4Ps B&M: Do you expect the new Ritz to outsell Maruti Swift?
SN:
No, we do not expect to do so with the Ritz, but we do expect it to become a market leader in the segment it operates. Swift has already become an iconic product in the time frame of four years...

4Ps B&M: Have you set any production or sales target for the new Ritz model?
SN:
No. We haven’t decided on any production or sales target. Rather, we have all the capabilities needed to meet the demand, and we will supply as much as the market wants.

4Ps B&M: But there is still a long waiting period for Swift and Swift DZire. How are you planning to deal with that?
SN:
We have already increased our capacity of producing diesel engines to 2,00,000, and by the end of this year, we are planning to take the figure further to 3,00,000. In total, we have a capacity of producing one million units and we usually keep the break-up of production very flexible. In fact, a 10-15 day waiting period doesn’t hurt the company or doesn’t take the customers away. Rather, it makes the company much more efficient, for in any case, blocking up inventory doesn’t make any business.

4Ps B&M: Can you throw some light on the pricing of the Ritz?
SN:
Ritz will be available in five different variants i.e. three in petrol i.e. the LXi, VXi, and ZXi and two in diesel i.e. the LDi and VDi. The Ritz will be available at an introductory price of Rs.3.9 lakh for an LXi and Rs.4.99 lakh for a VDi.

4Ps B&M: This seems quite interesting as Splash is available at a much higher price point in the European markets. How did you manage to pull the price down?
SN:
Well, the common use of the Swift Platform and the high localisation i.e. 95% has empowered us to introduce Ritz at a much lower price point than expected in the country.

4Ps B&M: Splash is also available with a 1L engine in the European countries. Why have you not introduced the same in the Indian market?
SN:
Ritz will be available in a 1.2L engine in India, and that’s because we thought that the 1L engine was unsuitable for the Indian market.

4Ps B&M: Why haven’t you introduced any ZDi variant for the Ritz in India?
SN:
That wouldn’t have made sense as the price in that case would have been too high!

4Ps B&M: Are you planning to phase out any product out of the Indian market?
SN:
Honsestly, we have no plans to phase out any existing model from the Indian market.

4Ps B&M: But there were rumours doing the rounds sometime back about Maruti phasing out the Maruti 800 and Omni?
SN:
That’s not true. We are not phasing out the Maruti 800 or Omni. Rather, the engineers are working on making them BS-IV compliant.

4Ps B&M: With the launch of SX4, everyone expected Maruti to shift its focus from small cars. So does the launch of A-star and Ritz signify that Maruti is again changing focus to the small car segment?
SN:
We never shifted our focus from the small car segment. Rather, with the SX4, we expanded our portfolio and entered a segment where we wanted to improve our grip.

4Ps B&M: What are you expectation with the new government?
SN:
The government helped a lot to deal with the last dull phase in the automotive market. Then whether it be the excise cut or the petrol price going down, it surely helped many players to sustain in the second half of 2008. And with the new government, I do not expect anything going back. If they can provide more help, everyone will be more than happy.

4Ps B&M: Is Maruti Suzuki planning a hybrid for the country?
SN:
If Maruti Suzuki brings a hybrid in the country, it will be through Suzuki Motor Corporation, Japan. The current hybrid that Suzuki has is a big car but they are working on developing a smaller hybrid. Let them develop and then we will think about bringing the same into the Indian market. Interestingly, there are many more options for the Indian market in the form of electric cars, CNG and LPG. We are looking at launching some CNG variants, but that will only happen after it gets a nationwide presence. Apart from that, we are working on a National Hybrid Project with the government to develop hybrids for the country in association with M&M and Tata Motors.

4Ps B&M: How was the company able to post a mind-blowing growth in the last fiscal when the other autocos were suffering?
SN:
In times of a slowdown, people actually do not prefer taking any risk. They prefer purchasing brands on which they have full trust, and in the automotive market, Maruti Suzuki comes on top on these grounds. Moreover, we saw the slowdown affecting urban areas of the country, so we instead moved aggressively into the rural and the semi-urban market, which helped a lot to cope up with the slowdown. The revenue contribution from the rural markets shot up to 9% this year, compared to 3.5-4% last year.

4Ps B&M: The next five years... Where do you see Maruti?
SN:
I want to see the company continuously lead the auto industry in the country and keep the overall market share more than 50%.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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