I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S
Auto Monitor
Vol. 13 No. 31
www.a mo nl i ne.i n
26 August 2013
CV
Pg 16-27
SPECIAL
48 Pages
Pg 18 FEATURE Pg 20 INTERVIEW “We aren’t here for the Heavy metal short term” Varroc’s first component for CVs is Nalin Mehta, MD and CEO, MTBL
a crankshaft.
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No sting in StingRay StingRay offers little that can excite a sluggish market or help leapfrog MSIL’s sales volume, says Nabeel A Khan.
A
s the country’s largest car manufacturer Maruti Suzuki India (MSIL) is at full throttle to maintain its supremacy. It needs to do this because Hyundai Motor, the country’s no 2 in terms of automobile sales, is chippy and getting too close for comfort at least in the compact segment. The Korean automobile major is expanding its i10 range and gearing up to launch Grand i10 early September. To outbid this, MSIL launched the WagonR StingRay in keeping with its growth strategy. But will it work well for them? And this at a time when the Indian automobile industry is going through a roller coaster ride and the company’s market share is shrinking to give way to new players. Looking at the glum automobiles market situation, MSIL has cut FY14 domestic growth forecast by one-third. Passenger vehicle sales posted its worst slide this fiscal with an 8 percent fall in July. MSIL is forced to offer discounts that are in the range
of at least 20 percent higher than what it offered last year. The company’s average discount is about Rs 14,600. Will the StingRay help the company in these desperate times? Maybe so, considering that the investment incurred in tweaking the WagonR will compensate in retaining customers if not help in adding new ones. StingRay will co-exist with the WagonR which has done well. MSIL claims to have sold around 1.3 million units of WagonR since its launch in December 1999. Speaking at the launch, Kenichi Ayukawa, Managing Director & CEO, MSIL, said, “With Stingray, we carry forward our focus to make our bestsellers even more attractive. The aggressively designed Stingray reinforces the fact that compact cars high on utility and reliability can also be premium and stylish. For the young customers who aspire for a bold and aggressively styled car, the Stingray will be a delightful choice.” At a time when rivals are cre-
ating miracles with the EcoSport, Amaze and Duster, MSIL seems content with ‘the 9th product in its compact car portfolio’. StingRay doesn’t evoke excitement in terms of price or look. The vehicle’s design appears well-grown up and a merely bulky version of WagonR with some additional features thrown in. Very little has changed in terms of the engine and engineering aspects, and the modifications are confined to the interiors and the exterior that gives a loud look especially at the front bumper grill. MSIL has not bothered to challenge its traditional competitive pricing prowess with the StingRay. The vehicle is available in three variants with the basic model LXi for Rs 4,09,999, VXi for Rs 4,37,999 and top model VXI (O) Rs 4,66,99 (ex-showroom Delhi). The prices are introductory. StingRay is costlier by Rs 20,000 than the WagonR while being targeted at young customers. MSIL top management admitted that a falling rupee applied pressure
Straying from the script Car buyers are not swayed by the marketing spiel of dealers anymore, although they do rely on them for understanding. Simultaneously, they will also look up the car online and prefer suggestions.
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ealers are expected to create a seamless transition between digital home and digital dealership and provide a complete, digital retail experience. Customers are increasingly spending less time in purchasing a vehicle. Moreover, dealers get fewer opportunities for face-toface interaction and OEMs must control the increasing complex-
ity of the new channel mix. This was a part of the takeaways that emerged from the Capgemini report, Cars Online 2012/2013, which focused on digital consumer behavior during the interest phase, the buying phase and ow nership/re-purchase phase. The survey was conducted across eight countries. However, most of the learnings from this report are based on patterns
noticed in the Indian market. The increasing use of web is also aiding in supporting the purchase decision for those customers planning to buy a car within a year. There is a general increase in demand for user-generated content. About 72 percent of Indians surveyed expect high quality and fast responses to their requests from dealers and manufacturers or they will look elsewhere.
Kenichi Ayukawa, MD & CEO, MSIL with Mayank Pareek, COO Marketing & Sales at the unveiling of Stingray
on the pricing, but declined to accept that it’s passing on the burden to the customer. The launch appears to be a strategy to create some excitement what with the festive season nearing. “Looking at the current macro-economic condition, I think the upcoming festive season will boost sales but not as strong as last year,” said Mayank Pareek, COO, (Marketing & Sales), MSIL. The StingRay is powered by a 998cc three-cylinder K-series engine. The K-10 engine on the Stingray delivers a power of 68PS @6200rpm and a high torque of 90Nm @3500 rpm. It will return a fuel efficiency of 20.51 kmpl of petrol (Certified as per rule 115 of CMVR1989). The car will soon
have CNG variants in line with the old WagonR. The car hardly has little potential to lure customers of any other manufacturer’s cars. However, it could take in some of the WagonR customers who will shuttle between the two models. With the increase in diesel prices, the price gap between petrol and diesel cars have narrowed and with it the demand for petrol engine cars. The company did not confirm a diesel variant for StingRay any time soon. “The industry average is about 54:46 between diesel and petrol now. In 2-3 quarters we can expect it to be 50:50,” Pareek added. In July, MSIL posted 10.88 percent increase in domestic passenger car sales at 63,040 units.
In terms of service, while there’s a general satisfaction with the service portfolio of dealers and OEMs among customers thus leading to loyalty, customers would prefer if they suitably altered the design of service contracts that would ensure their future visits to the dealer. It’s generally well known that customers look askance when dealers turn a deaf ear to their service requests –sales or after-sales. Customers prefer that service be offered as a complete package. According to the survey, though satisfaction with sales and after-sales services has risen in 2012, last year’s results show that customer loyalty is volatile. Dealers also need to develop modular service contracts for different regions. The streamlined digital experience also has implications for OEMs. Manufacturers would do
well to enable dealers to engage in the digital consumer purchase experience by ensuring the below mentioned points: Ensure integration of online and off line consumer touch points (web + dealer); Adapt new digital technologies in dealers’ showrooms; Align showroom and web experience; Enable the dealer to take full advantage of limited opportunities to engage with consumers; Incorporate user-generated content on own web pages, thereby enabling control and management of content; Focus on quality, not on quantity, when implementing features; and make sure to be leading clearly and intuitively through purchasing process (incl. interest phase) on your website.
Contd. on Pg 12