Suzuki to position Maruti as a low cost sub brand for developing countries

Saturday 29 December 2012, 10:51 AM by

Suzuki Motor Corporation of Japan, with a share of 56.2 per cent in the Maruti Suzuki Joint Venture (JV), wishes to position Maruti as a brand for producing affordable cars in developing countries. Currently all the vehicles that are exported out of the country are branded under the name Suzuki. This plan was already in the minds of the top management in Suzuki, but was not implemented due to lesser vehicles in previous years.

Suzuki to position Maruti as a low cost sub brand for developing countries  |
Suzuki to position Maruti as a low cost sub brand for developing countries

Maruti helped the JV negotiate tough business environment during the economic recession of 2008, which increased the faith of Suzuki in the Indian company. This way, Maruti would become a sub brand of Suzuki in the global market and focus on building low cost cars for markets such as Africa. This move is similar to what Renault has done for Dacia, Nissan for Datsun or Toyota for Daihatsu, where Dacia, Daihatsu and Datsun are low cost sub brands.

In India, Maruti has shown its expertise in developing hatchbacks, which have achieved phenomenal success over the years. Some of these cars include the Maruti 800, Alto, Wagon R and Zen. Even if Suzuki plans a re-badging exercise in the future, similar to Renault and Nissan, then this move would help reducing costs in platform, engine and inventory sharing. With respect to the decision to continue producing low cost cars, R.C. Bhargava, Chairman at Maruti Suzuki, said,” We will never go to the premium segment. Neither Maruti nor Suzuki (Corporation) will manufacture such cars. Small cars will remain the largest segment in India and our focus is to be a first-class player in this segment as that is our bread and butter."

The decision for not entering the premium segment was made with the Kizashi not achieving much success on Indian terrain. Moreover, Maruti Suzuki has already built a brand image of being the top small car provider in the country. So adapting itself to premium vehicles would mean a change in brand image, which is not something a majority of Indian customers would identify with.

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