CHANGING CHANNELS

Carmakers are adding layers to their dealerships to reach more buyers and meet rising aspirations, while increasing revenue per car. Do they have the right products?

- SOHINI DAS

Maruti Suzuki India, the country's largest maker of passenger cars, wants to add more layers to its dealerships with Nexa Studio and Arena Satellite outlets, to go with its existing Arena and Nexa showrooms. Clearly, the company has come a long way from 2015, when it raised eyebrows with its decision to start the Nexa channel for a more premium buying experience. But Nexa, which started with the S-Cross, a crossover between a sedan and a sports utility vehicle, has come good. In nine years, it has sold 2.7 million vehicles and grown steadily to contribute 33 per cent of the company's sales in 2023-24. Last financial year, the Nexa lineup - which now includes Baleno (the second Nexa vehicle after the S-Cross), Grand Vitara, Fronx, Invicto, Jimny, Ignis, XL6, and Ciaz - grew by 45 per cent.

Meanwhile, the Arena line has continued to offer more mass market vehicles such as the Swift, Brezza, Wagon R, Ertiga, and others.

India's passenger vehicle market is the third largest in the world now, at more than 4 million units a year, but car ownership remains low, at 3 per cent of the population. This signals a huge potential to deepen penetration. With its multi-channel strategy, Maruti aims to do that. And it is not alone. With the rise of electric vehicles (EVs), others, too, are compelled to look for differentiators. Tata Motors, for example, has started the Tata.eV range of showrooms.

A new Nexa a day

"In Tier-II and -III cities, there is more affinity for hatchbacks, while big cities prefer SUVs," Partho Banerjee, Senior Executive Officer, Marketing & Sales, Maruti Suzuki, tells Business Standard.

According to him, in the digital era there is no real divide between rural and urban markets. "We have already had a concept of mobile showrooms in the Arena channel. We are testing markets and wherever we see potential, we can plan these satellite showrooms - Arena Satellite," he says.