Maruti Suzuki shifts focus on improving services to tackle recent slump

author image CarTrade Editorial Team
Thursday 25 April 2013, 09:58 AM

Maruti Suzuki is attempting to change its strategy in order to beat the recent market slowdown, by focussing more on services rather than on new car sales. Through this strategy, the company will try and keep its channel partners solvent and help them make profits during the downturn. The move is also buoyed by the fact that the service business is pegged to grow by 20 per cent in the next three years,

In terms of numbers, Maruti's large and omnipresent service network managed to service more than 17 million cars during FY 2012-13, which included accidental repairs as well. Supporting the above strategy, this was a rise of 5 per cent in FY 2012-13, as compared to the previous one. In fact, during the current fiscal, it is anticipated that the service business would go up by 8 per cent, which shows a clear increase in service demand. Reportedly, Maruti's servicing load is expected to touch 20 million vehicles by 2015-16. Commenting on the same, a senior analyst with a Delhi-based MNC consultancy said, “It would not be an exaggeration to say that car service in a way is recession-proof and for car manufacturers, with robust after sales service network, it is the biggest weaponry to combat slowdown conditions.”

As per top executives in Maruti Suzuki, while it is becoming increasingly difficult to sell substantial number of vehicles, it is the service network which is able to keep the company profitable in the current situation. During a recent meeting with dealers, Chief Operating Officer (marketing and sales) Mayank Pareek said that new car sales is like “income from the stock market”, while service income can be referred to as “fixed deposit in a bank.” Though sales would depend on market conditions, but money from service is constant, as per Pareek.

Without a doubt, Maruti Suzuki has the enviable distinction of owning the largest number of sales and service outlets in the country. More than 3000 authorised workshops are present across 1400 cities. Almost 50,000 vehicles a day are serviced every day. In addition, more than 90,000 persons are employees in these outlets. The service network is one major reason why other manufacturers have not been able to gain as much of a stronghold on the Indian automotive market as Maruti Suzuki.

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