Ertiga creates a new category


After the success of Swift, small car giant Maruti Suzuki now hopes to create ripples in the multi-utility vehicle (MUV) space with the launch of the Ertiga on Thursday.

As with the premium hatchback, the company expects to create a new category with the introduction of the Ertiga in the Indian market. Shashank Srivastava, chief general manager (sales & marketing), Maruti Suzuki, says unlike other MPVs, which are tagged upwards of Rs 9-10 lakh, Ertiga has been designed for buyers looking at upgrading from hatchbacks to a larger vehicle at an affordable price.

“There are 15 million people who own vehicles in the country. Of these around 10 million consumers are looking at upgrading their vehicles. So the opportunity is immense”, says Srivastava. Ertiga is targeted at urban consumers aged between 30-45 years with average income of Rs 50,000 per month.

“Ertiga will occupy a niche between premium hatchbacks and larger utility vehicles. It is a compact multi-purpose vehicle what we term a ‘life utility vehicle’ (LUV) designed to meet the requirements of the urban consumers who have an active lifestyle”, adds Srivastava.

He declined to specify the pricing points of the new vehicle, but industry sources indicate it is likely to be tagged around Rs 7 lakh. While Mahindra Xylo is priced upwards of Rs 7.33 lakh, Toyota Innova comes for between Rs 8.89 lakh and Rs 13.58 lakh (ex-showrrom, Delhi).

The Ertiga has been designed based on negative feedback Maruti Suzuki received from consumers regarding vehicles in the MPV segment. The company says research revealed prospective consumers often found vehicles available in the category to be large leading to difficulties in manoeuvreing and parking while driving within cities. The larger size also meant reduced fuel efficiency raising operating costs of MPVs.

“At present, MPVs are largely used for commercial purposes. What we have tried to do is to address the concerns consumers voiced and design a vehicle which is compact, stylish and affordable for the general buyer. Hence came the Ertiga”, informs Srivastava.

Interestingly, Toyota was the first carmaker which looked at tapping this niche MPV segment in the country with a model below its own best-selling Innova two years ago. However, production capacity constraints and focus on launching the Etios range of compact cars kept these plans on the backburner. Rivals are already making a beeline after Maruti Suzuki to tap the segment with planned launches. These include Enjoy from General Motors and EcoSport from the Ford fold. Reports suggest Toyota may also look at introducing a similar vehicle based on the Etios platform.

The Ertiga would be available in both gasoline and diesel variants. While the gasoline variant would be equipped with the new 1.4 litre K-series engine and deliver a mileage of 16.02 km per litre, the diesel model is loaded with the 1.3 litre engine the company sources under a technological licence with Fiat. The company claims the diesel variant has fuel efficiency of 20.77 kmpl. The mileage offered by the Ertiga is considerably higher than that of the Innova which delivers between 8.3 and 12.8 kmpl depending on the fuel option. However, the Toyota vehicle comes strapped with a much powerful 2.5 litre diesel engine.

Maruti Suzuki has spent close to Rs 430 crore to develop the Ertiga and the company expects to complete the portfolio it has on offer in India with the product. The MUV segment accounts at present for around 14 per cent of the domestic automobile market. Over the last three years this category has registered compounded annual growth rate (CAGR) of over 25 per cent as compared to the 16 per cent growth recorded in the overall industry. As many as 240,000 MPVs were sold in the country in the last financial year.

The company currently has negligible presence in the category with the Gypsy and Grand Vitara. The seven-seater LUV based on the RIII concept was unveiled by Maruti Suzuki at the auto show in Delhi in 2010. It will take on the likes of Toyota Innova which has changed the game in the MUV space in India since its launch in 2005. Innova clocks average sales of around 5,000 units a month, which is what Maruti Suzuki is eyeing from the Ertiga within a month of launch. Toyota has sold around 328,000 units of the Innova in India so far.