Maruti banks on SX4 to steer mid-size revival

Over a decade ago, when Maruti Udyog first launched the Esteem, it received an overwhelming number of bookings, something to the tune of 2.7 lakh plus. This was also the time when the Fiat Uno got nearly three lakh bookings, a clear indication that customers desperately wanted something new except that the options were limited.

The Esteem had its place in the sun but was soon relegated to the sidelines once competition entered the market in the form of the Ikon and Accent. Maruti launched the Baleno but its steep price tag was of no help and since then, the Honda City has taken the top spot in the C segment. The recently launched SX4 could change Maruti’s fortunes going by what its managing director, Jagdish Khattar has to say. It is competitively priced (Rs 6.54 lakh ex-showroom Mumbai for the base Vxi, Rs 7.25 lakh for the Zxi and Rs 7.6 lakh for the top-end Zxi).

TAKING ON RIVALS

It only has a petrol option to offer quite unlike the Logan whose diesel sibling, according to Mahindra Renault dealers, has caught the fancy of the market. However, the glitch could lie in timely deliveries and this is where Maruti will face no problems. Khattar also believes that the absence of a diesel will not be an issue and he could be right here if the success of the Honda City is any indication.

He rejects the notion that customers perceive his company only as a compact carmaker and is convinced that the Baleno would have worked wonders if only it had been priced rightly. And while he refuses to elaborate, it is an open secret that this was a decision that had little to do with the management and more with bureaucratic interference.

The past, of course, is irrelevant and it will be interesting to see how the SX4 does in the market. The initial response has been very positive and indications are that 4,000 units will be sold by the end of May. And if this continues, there could be some interesting things in store for the C-segment.

EATING INTO HONDA

It does not look as if the City will come in for any immediate pressure, given the kind of brand loyalty it enjoys but the SX4 may just eat a bit into Honda’s share. As for the Fiesta and Verna, they have diesel options but whether this will be a long-term advantage remains to be seen.

What will certainly happen is that the mid-size segment will grow faster in the coming months. Years ago, when the Octavia made its debut, nobody thought that the D segment would reach such numbers as is the case today (50,000 plus cars annually). The same could happen here. It is also a moot point if potential customers could be lost because of the diesel disadvantage. Khattar refers to the Swift whose petrol version has reported bigger numbers even after the introduction of its diesel sibling.

What began as 4,000 units a month (of only petrol) is now 7,000 (4,500 petrol and 2,500 diesel) and, as he puts it, Maruti dealers have been doing a great job in convincing buyers not to wait for the diesel option but go in for the petrol Swift instead. However, as demand for diesel grows, the company will have to go by what the market needs and this could be a challenge. Given a choice , Maruti would like sales of petrol cars to continue unabated but current fuel preference trends indicate that this will not be case too long.

MURALI GOPALAN