Maruti Suzuki cars sell for mainly two reasons – lower price compared to rivals and wide after sales service network. Although no car maker is even near to rivalling the wide dealership spread of Maruti Suzuki, many are trying to offer well priced vehicles which make Maruti Suzuki cars lose their value for money tag. Just recently Honda launched the Amaze which was priced in such a way that the Swift DZire started to look overpriced. It’s a different case the DZire’s sales seem to be unaffected by the Amaze as Honda doesn’t have the production capacity to give Maruti Suzuki sleepless nights.
Maruti Suzuki showcased the XA Alpha at the 2012 Auto Expo, which is the concept version of their upcoming compact SUV, expected to go on sale in 2014. The XA Alpha name will not be retained and the vehicle will look nothing like what you see here. Maruti Suzuki is going to extensively use components from the Swift parts bin which will help them price the vehicle very aggressively. However with Ford pricing the EcoSport at a mouth watering Rs. 5.59 lakhs for the base variant, how will Maruti Suzuki position their compact SUV?
Maruti Suzuki’s philosophy of being the cheapest in every segment helps them to quite an extent. The Eritga has been doing good numbers as it is the cheapest 7-seater MUV around. If Maruti tries to match Ford in terms of pricing, they will end up seriously cannibalising their own products like the Swift, Swift DZire and to a certain extent even the Ertiga. We did a quick visit to a Maruti Suzuki and Ford dealership earlier today and found the former’s showroom quite empty while the latter had people lined up with cash in hand to book their EcoSport. Some of them were even ready to pay Rs. 50,000/- extra to get immediate delivery. After all Ford has done a Maruti with the EcoSport’s pricing.
So what should Maruti Suzuki do now? Missing out on the growing compact SUV segment is not a wise move at all. The company could do something drastic to justify not being the cheapest in the segment. Maybe all variants of the XA Alpha could have ABS, airbags and alloy wheels as standard? Or maybe Maruti Suzuki could launch their compact SUV in V and Z trims only (with the option of 4-wheel drive) which could be priced cheaper than the EcoSport’s top variants? If you were working at Maruti Suzuki and had to decide on the price and positioning of the XA Alpha, what would you do?
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