‘As markets evolve, we will set up Nexa showrooms in Tier 2 and 3 cities.’

Maruti Suzuki plans to more than double the number of its Nexa showrooms to 250 by March 2017. Before inaugurating the 100th Nexa store on January 22, R S Kalsi, executive director (marketing & sales), Maruti Suzuki India, spoke to Sumantra B Barooah about expanding the Nexa network, dealership sustainability, production ramp up of the Baleno and the price reduction of the S-Cross.

Are you also considering Tier 2 and Tier 3 markets in India for Nexa showrooms?

Yes, the entire country is in our scanner. As the markets evolve, we will certainly go there.

Some say that sustainability is becoming an issue for Maruti Nexa dealerships?

Sustainability of our dealers has never been our concern. I can tell you they can compare with anywhere in the competition. Today if I give an advertisement for one location, there will be 50 applications and 25 of those would be from competition's dealerships.

As regards dealerships, we are not considering anyone outside the Maruti Suzuki network because we want to have the synergy of our existing channel and complement, supplement the existing channel. So the opportunity for the Nexa channel has been given to the existing channel. The fact that we have been able to set up 100 Nexa showrooms in six months speaks volumes. We have worked out a business model for them and they have studied the business viability and only then have they come forward.

Sometime ago Maruti Suzuki had enhanced the margins for dealers. Is the company likely to play any such move again soon?

That's an ongoing programme. We always ensure that our dealers make good profits so that can provide good service to the customers.

Exports for the Baleno to Japan start this month. What kind of export numbers do you expect for the Baleno?

We have export orders from more than 100 countries for the Baleno. Since production of this model has started from only India, so maybe in the first phase there would be certain volumes and there would be repeat orders. So, at this point of time, I would like to say that the numbers don't matter. What matters is the countries which are opting for the Baleno. The reason for excitement for us is that it is going back to our parent company's country – Japan. So, that's a matter of great pride and excitement for all the people associated in Maruti.

Which is the first set of countries, apart from Japan?

It is western Europe, Latin America and some of the African countries. We are going to export to all these countries.

Wouldn’t that put pressure on the production for domestic market?

Our production is fairly flexible. We are always in close discussions with them. Certainly, we will try to enhance our production volume.       

You have reduced the price of the S-Cross. What led to it and what kind of uptick do you expect in sales?

Sales will go up. Already bookings have increased. It is doing very well.

In India, the customer compares the price to value equation to a great extent. Certainly, between the 1.3 and the 1.6 S-Cross the gap which was there, was, you know, perceived to be high by the customer. So, we have done some aggressive localisation and some price correction. We have now made it quite acceptable in line with market expectation.