Mass market models like the Baleno and Ciaz being added to Maruti’s NEXA chain has led to a lack of differentiation between the two channels.
Initiated in July 2015, Maruti Suzuki Nexa as a stand-alone automobile network ranks after Maruti Suzuki Arena, Hyundai and Tata Motors as the 4th largest network and it just recently recorded its 2 millionth sale. This is surely commendable and possibly ranks as one of the mother company’s biggest successes in India. But has something been lost in the process?
Companies have different channels or networks when they have different brands to offer. So, Inditex would have a Zara network and a Massimo Dutti. Or GM would have a channel for each brand it added to its vast portfolio over the years. The logic for a separate channel is that the customer experience designed for one brand is very different from the other. An Opel in its DNA is very different from an Alfa Romeo, catering to different mindsets, hence, they need separate channels even if belonging to Stellantis. So, brand differentiation or distinctiveness is the key logic applied to creating a specific channel or network.
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What is the logic in creating Nexa? As I initially understood, it was meant to house niche vehicles in the Maruti Suzuki portfolio, which need a different skillset in marketing and promoting, and a different ambience from the run-of-the-mill portfolio. The Ignis and the S-cross fitted the bill. Very quirky vehicles with niche appeal. It made sense to build a fresh network for them and more of their ilk, away from the volume-driven Alto, Swift and Dzire.
It was a bold step by Maruti Suzuki and I thought they had finally understood the need to psychographically approach a maturing Indian market. But after just three months, the entire proposition was diluted when the volume-based mass-market Baleno was added to the portfolio under pressure from dealers wanting volumes. And with the transfer of the Ciaz from Arena to Nexa, the final nail was driven in the coffin of a brilliant marketing and positioning differentiator.
Toyota had experimented with multiple channels in Japan called Toyota Auto, Toyopet, Corolla and Netz for years. Given the brand’s 50 percent market share, they could afford to do that as people would go to one channel or the other for a vehicle of their choice. Just like the case with Arena and Nexa.
But they got so undifferentiated over time that the management finally decided to bring them all under the single badge of Toyota. I’m afraid Nexa and Arena are headed the way and back towards a unified existence. Yes, dealer viability and sustainability need to be addressed, but it could have been through other business practices instead of rushing products not suitable to the Nexa channel. Ironically, with the Jimny and Fronx, Maruti Suzuki has some very cool, off-beat ‘Nexa’ products. Thus, what’s needed now is a re-orientation of the two channels’ positioning and a proper sieve for products sold through both.
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