In fact, sport utility vehicle (SUV) sales were growing exponentially, seemingly attracting buyers of the humble small car — the mainstay of the Indian market since the launch of the Maruti 800 in 1983.
Changing preferences
Naturally, the mood was different at the headquarters of India’s largest carmaker Maruti Suzuki, which dominates the market on the back of affordable and easy-to-maintain small cars. “A large chunk of Indian consumers started shifting from functionality — which is about things like fuel efficiency — to aspiration, which is about design, performance and image,” said Shashank Srivastava, senior executive officer, marketing and sales, Maruti Suzuki.
This didn’t bode well for the brand, whose SUV portfolio was negligible at this point. This change in Indians’ preference towards SUVs was so rapid that the market leader was caught off guard.
“We underestimated the pace at which the SUV [segment] might grow. Remember, the SUV market in 2015-16 was 16% of the total market, today it is over 45%,” Srivastava told Brand Equity.
That year, the company lost an achievement it took great pride in — accounting for more than 50% of the Indian market by sales volume. “We have been market leaders for 40 years, but the real kick is in getting to 50%,” Srivastava said. But with the Indian customer’s newfound demand for SUVs, this statistic began slipping from the brand’s grip.
Number crunching
The company set in motion a plan to regain a 50% market share, this time with a little help from the SUV segment.
So far, the brand led the small car category, enjoying 90% of the market share. Overall, the company accounted for two-thirds of the Indian car market; it was the SUV segment, in which it had just 7.1% market share even till July 2022, that dragged the brand’s numbers down. Some complex calculations later, the carmaker outlined a fresh game plan: To achieve a 33% share of the SUV space. Achieving this would push its overall market share in India, across categories, to above 50%.
However, this was easier said than done. There were two challenges: As of 2021, the Indian market had about 46 different SUV models on sale. Maruti Suzuki was heavily outnumbered with just one model on offer at the time: the Brezza. Secondly, the Maruti Suzuki brand had very strong associations with functional and fuel efficient small cars, not aspirational SUVs. “[It was] probably an impossible task marketing-wise to shift totally from a ‘massy’ type brand to something more exclusive and aspirational,” Srivastava said.
Maruti Suzuki had already begun addressing its perception problem a while back, however, with its premium sales channel ‘Nexa’ launched nearly a decade ago. Now, it decided to launch its new SUVs by capitalising on Nexa.
“Maruti Suzuki has been consistently pushing the envelope in terms of pricing and premium-ness with its top-end models over the last 10 years,” said Avik Chattopadhyay, an automotive industry consultant. “So, in a way, the company now had to build on this trend.”
A line of SUVs
The company set itself an aggressive target — to become the largest SUV maker in India by the end of FY24 with a portfolio of four SUVs. The Brezza provided a good starting point in the popular sub-compact SUV segment.
Next, the company entered the equally popular compact SUV segment with its Grand Vitara (developed in partnership with Toyota). Upon launch, this was one of Maruti Suzuki’s most expensive cars ever. Hyundai and Kia dominated this category with their popular models Creta and Seltos, respectively; the Grand Vitara had to work that much harder to make a mark with consumers.
However, the launch began turning the tide in the company’s favour. Together, the Brezza and Grand Vitara helped surge Maruti Suzuki’s SUV market share, taking it upwards of 16% as of the April-March 2023 quarter.
SUV market leadership was still out of reach for the brand. Continuing with its strategy with an eye on the outcome, Maruti Suzuki launched its third SUV in April 2023 — the Fronx, another subcompact SUV to be sold via Nexa. “We found from our research that there is a class of people: Urban, tech-oriented, sophisticated, young, who want something different, sleeker and newer,” said Srivastava about why the Fronx was launched.
Firing on all fronts, the company next set its eye on lifestyle SUVs — an emerging segment. Mahindra had already proved the category’s viability with the success of its Thar. The SUV, known for its stylish ruggedness, had wait periods upwards of a year even two years after its launch.
Maruti Suzuki made a bold entrance in the segment with its Jimny a few months ago. Incidentally, it had been making the three-door version of the Jimny in India for several years now, but exclusively for exports. This was because research revealed not many Indians were interested in a three-door car. But it was now time to launch a five-door version for the local market.
And with this, Maruti’s Suzuki completes its SUV superfecta, at least for the moment.
Marketing tales
While marketing new SUVs in a category that already has over 45 models is a challenge unto itself, Maruti Suzuki’s ad agencies also had their task cut out for them. Rohit Raj, VP strategic planning, Dentsu Creative India, which has Fronx’s creative duties, said, “Consumers have a strong emotional connect to the SUV segment. Hence, it becomes important to define the emotional pay-off that the brand will deliver to the consumer over and above the functional needs that the product addresses.”
Vasudha Misra, lead creative, Lintas C:EX, believes that visually, most communication in the category sees a lot of sameness. “[The visuals are] usually shot in the same tone and style, with narratives that are often about breaking free and independence,” she said. Communicating the right USP, therefore, is quite the challenge.
For instance, Hakuhodo, which handles the brand’s Grand Vitara business, focuses on the ‘All Grip’ technology powering the vehicle, the electric hybrid engine and the choice for a driver to toggle between manual and automatic modes through its communication. “It’s a great vehicle for all kinds of terrains, from the city to the highways and from forests to the mountains. And that’s exactly how we’ve positioned the grand vehicle with the tagline ‘Rule Every Road’,” said Jayanto Banerjee, COO, Hakuhodo India.
For the Fronx, Maruti Suzuki took a slightly different approach, choosing to focus on the SUV’s “striking and fresh design language”. Raj said, “It has sought to redefine the visual narrative of the very competitive SUV market by bringing in a sporty and aerodynamic design language.” This thought culminated in its tagline ‘Shape of New’.
As for the Jimny, the campaigns focus on a lifestyle of adventure and offroading, with its ‘Never Turn Back’ tagline. “We tried to change the narrative from a personal POV to a selfless one. And by adding a little heart and soul to something that is just seen as brute metal,” said Misra.
Pre-launch bookings are a strong indicator of a campaign’s success since consumers haven’t seen, experienced or read reviews about the car yet, added Misra. “The amazing number of pre-launch bookings we received [for the Jimny] was a testament to the campaign hitting its mark with the consumers,” she added.
Fruit of the labour
Maruti Suzuki’s aggressive strategy has paid off, at least for the moment. Cut to July 2023, the company sold more SUVs than any other carmaker in India, accounting for 24.6% market share. However, it still lags behind peers when cumulative sales (since the beginning of the financial year) are calculated.
“Our ranking in SUVs has improved from fourth last year to first in July this year,” said Srivastava, adding that the company should hopefully end this financial year as the top SUV maker with a market share of 24-25%.
The next stop? It’s clear, said Srivastava. Achieving 33% SUV market share, and from thereon, only to sell every second car in India, again