Maruti Suzuki targets Nexa to be second biggest car retailer in FY24, aims to nudge ahead of Hyundai and Tata Motors

As the race for number two position between Tata Motors and Hyundai Motor gets intense, Maruti Suzuki, the country's largest car maker, is attempting to nudge ahead of its rivals for the second spot too, through its premium channel, under the Nexa brand for FY24, which has recently achieved the 2 million cumulative sales milestone. 

Buoyed by the addition of new models like Fronx, Jimny and full year sales of Grand Vitara mid-size SUV, Maruti Suzuki expects to grow its volumes by over 65-70 percent in the next financial year and breach the half a million mark with sales of over six lakh retails, say people in the know. On an average, Maruti Suzuki sells about 30,000 units every month from its premium Nexa channel, it is likely to close with volumes of 3.6-3.7 lakh units this financial year.

This is yet another aggressive target set by the largest car maker, having already announced its plans of grabbing SUV leadership from Tata Motors in FY24 and regaining 50 percent share by FY25.  

Maruti Suzuki has about 449 Nexa showrooms in 287 cities. Nexa brand currently has a market share of about 10 percent. With the addition of new models like Fronx, Jimny, Grand Vitara and the new Innova Hycross alternative – the portfolio at the Nexa showroom is likely to swell to eight models in the next financial year which may bring in the incremental volumes.

At present Hyundai Motor India is the second largest car brand in the country with sales of 5.16 lakh units followed by Tata Motors which has retailed about 4.93 lakh units with just 25,000 units separating the two. Whereas Nexa sales are likely to end with 3.6-3.7 lakh units at the FY23 – so the gap is quite substantial. Yes, Maruti has new models on the anvil, which will bring in incremental sales, but it still appears to be a “big mountain” to climb for Maruti Suzuki, say experts.

Shashank Srivastava, Senior Executive Director, Sales and Marketing at Maruti Suzuki told Autocar Professional It is a tall and a stretched target but it is still a challenge worth taking up. “The target will be a stretch, but it is a good target to take. It is not with arrogance we are saying this, but it is a good objective for us to galvanise our entire team, supply chain, production, sales and marketing to move towards this target of Number Two. We understand that it is going to be difficult, we believe we can make a strong attempt at it.”

About 25 percent of the buyers under the Nexa channel are replacement car buyers, 40 percent of the buyers are additional car buyers. The buyers of cars from Nexa channel are relatively affluent when compared to its traditional mass market buyers from the Arena Channel.

The monthly household income of car buyers at Nexa is about Rs 94,000 versus Rs 69,000 of an Arena buyer, Maruti Suzuki shared.

Srivastava says for cars sold under Nexa brand, the win back percentage or prospective buyers owning a non-Maruti is fairly high at 35 percent which essentially means, the company is able to get a sizable share of car upgraders from the market — who owned a non-Maruti brand.

The company in fact is the leader even in the Rs 10-15 lakh bracket.

“While the perception may be that we are leaders only in sub-Rs 10 lakh space, we are also leaders in Rs 10-15 lakh space with 26 percent market share and we are confident that we will be able to do well even in Rs 15 lakh, led by our experience and our infrastructure. We have enough products now with Fronx, Jimny, we should be able to get much higher volumes next year,” he added.

Srivastava said that Nexa was conceptualised in 2015 with a philosophy of providing unique experiences, along with innovative and intelligent technology through a diverse product portfolio.

"The success of NEXA reaching the 2 million sales milestone is a testimony of customer's love for our hi-tech and feature-packed offerings and premium experiences", he added, stating that the Nexa has contributed to more than 20 percent of total Maruti Suzuki sales and the numbers are going strong, stating that with the recent unveiling of two new SUVs – Jimny and Fronx, the NEXA portfolio looks stronger than ever. "Both have garnered combined booking numbers of over 38,000. We’re confident that the NEXA channel is poised
for greater success in the upcoming year,” he stated.