Case Study on Maruti Swift
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Maruti launched one of its biggest success stories ever, Swift, into the Indian market in May 2005. The hatchback has been brought into the market with huge buzz and wide speculation that in its first quarter, it had a booking of around 31,000 vehicles. It is very interesting to learn and know how this brand Swift has been built. Swift is Marutis first new model built from scratch after Suzuki took charge of the Indian venture.
Objectives of Swift
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The Emerging Hatchback Customer: Maruti sensed a nascent need in the market for a hatchback with a few luxury features, and has realised that while its 800 had been its bread and butter for long, and models like Esteem and Baleno doing from just about surviving to well enough in the market, it had to concentrate on the Hatchback segment which had increasing demand.
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Huge Opportunities in Hatchback: With players like Hyundai Getz, Fiat Palio and Tata Indica doing well in the Indian market, Maruti sensed a position for itself in the segment.
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Diesel Opportunity: While Maruti’s smaller vehicles dint allow them to be made Diesel compatible because of engine requirements, Maruti sensed an opportunity in the Hatchback segment for a model that could be converted to a Diesel offering in due course of time. This could offer a foothold for Maruti in the 19% Diesel Car market in India.
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Image Makeover: Maruti has always been branded as a carmaker for fuel-efficient India, that has always gone easy on the looks and styling department of it. And here was a real chance in front of Maruti of proving those detractors wrong.
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Globalisation of Suzuki: The globalisation decision of Suzuki thus sharing its operations across all its markets, enabled Maruti to think big and design a car usable for various markets.
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Innovation: There was a requirement for innovation in the Maruti stable with most of its names aging out, and opening up avenues for competitors to dominate. All this and more was because of Maruti not being contemporary enough in styling and offering. This compelled Maruti to think towards a stylish, durable and affordable car for the Indian Market in the hatchback segment and thus, Swift was born.
Company Profile
Maruti collaborated with Suzuki of Japan to produce cars in 1983. At this time, the Indian car market had stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983. With MUL’s entry, the passenger car market saw a spurt in demand. The sector registered 18.6% CAGR growth in sales during 1981-90. The company reached a total production of one million vehicles in March 1994, becoming the first Indian company to cross that milestone. It crossed the two million mark in 1997. In 2001, it launched the new businesses — �True Value’, �Maruti Finance’, �Maruti Insurance’ and �N2N’. In 2003, the company listed on BSE & NSE after its public issue.
MUL — now Maruti Suzuki Ltd — is the leading automobile company in the passenger car segment with over 50% market share in FY 04. It has presence across many segments in automobiles. It is the leader in mini and the compact segment with brands like �800’, �Alto’, �WagonR’, �Swift’ and �Zen’. It also has presence in the mid-size segment with its �Esteem’, �Baleno’, newly launched �Swift DZire’ brands and the �Omni’, �Vitara’ and �Versa’ models.
The sales figures for Maruti in 2007-08 are as follows:
Models
March
Till March
% Change
2007-08
2006-07
%change
69553
79245
-12.2%
Omni, Versa
-7.2%
89729
83091
Alto, Wagon-R, Zen, Swift
41869
47068
-11.0%
499280
440375
13.4%
SX4, Dzire, Esteem, Baleno
212.2%
49335
29697
66.1%
Total Passenger Cars
63799
64284
-0.8%
707897
632408
11.9%
Grand Vitara *, Gypsy
128.7%
21.7%
Domestic
64421
64556
-0.2%
711818
635629
12.0%
Export
-18.6%
53024
39295
34.9%
Total Sales
70296
71772
-2.1%
764842
674924
13.3%
* SX4 launched in May 2007, Grand Vitara launched in July 2007, DZire launched in March 2008, Baleno figures are for 2006-07
Launch of Swift
Swift has always been targeted as a stylish, youthful vehicle for contemporary India. It was thus prudent to choose a mass medium that has never been used before to create buzz around Swift. Probably, this is what made Maruti tie up with Yash Raj Films — a premium production house in Bollywood — to tie up with their mega production of 2005 — Bunty aur Babli — to launch Swift.
Maruti Udyog inked an in-film product placement deal with Yash Chopras Yashraj Films – the first ever by the market leader – for featuring Swift in their film Bunty aur Babli. As part of this strategy, the car maker timed the Indian debut of its World Car with the countrywide release of the Bollywood potboiler in May. The main idea was to keep the excitement high around the product introduction. The film release and the car launch happened in the same week. There were three versions of Swift at launch. All had the 1300 cc Esteem engine, suitably tuned for the hatchback version.
The pricing for the variants was as follows:
Model
Price
Swift LXi
Rs. 387000
Swift VXi
Rs. 405000
Swift ZXi
Rs. 485000
These were declared as the introductory prices, and the prices increased later. The company declared that they had received an order for 8000-odd cars before launch.
Even the top end version was priced below that of a three-box car like the Indigo. That was smart – if the Swift would cost more than an Indigo, that would have most looked good to the value conscious Indian.