Maruti Suzuki shifts gears, moves from hatchbacks to SUV-based models

Three and a half years ago, as French carmaker Renault was basking in the new-found success of the Kwid, a cross between an SUV and a car, a team of engineers at Maruti Suzuki, under the leadership of C V Raman, senior executive director, engineering, were busy etching a new design language for India's largest passenger vehicle maker. 


Fast forward to September 2019, Maruti’s first mini SUV, S Presso (Rs 3.71 lakh to Rs 4.99 lakh, ex-showroom) which broke cover at the 2018 Auto Expo as a Future S concept, debuts in the Indian market. It is followed by the Ignis, a not-so-popular hatch targeted at young buyers getting an SUV makeover, and breaking cover at 2020 Auto Expo earlier in the month. “It’s (the Future-S) a very different kind of direction from the design point of view. Every platform, engine combination from Maruti will see the SUV stance as that’s where the market is,” says Raman. 


The trend in India, where people are primarily looking for a high seating position, easy visibility in the front and the rear, an upright stance and high ground clearance in an SUV, is very different from other markets such as Europe where there is clear distinction between a cross-over and an SUV, he says.

The new design philosophy based on the SUV-like traits that underpins both the models, the S Presso and the Ignis, marks a paradigm shift for Maruti which has had its fortune closely tied to hatchbacks as a body type. To some extent, the company’s hugely successful Brezza and some other models including the S Cross, the XL6 and the Ertiga had reduced dependence on hatchbacks and were whetting the appetite of the SUV-hungry buyers, but all at higher price points. chart



A growing demand for models bearing SUV-like characteristics, a high seating position that offers a clear view, an upright stance, a roomy interior, and a higher ground clearance among other features, even among the entry-level buyers made it inevitable for the company to have a model at an affordable price point that drove like a car but had the proportions of an SUV. If the initial sales volumes of the S-Presso — 8,000 to 10,000 units a month — are any indication, Maruti might hit the sweet spot with its strategy, say analysts. The preference in India and globally is shifting towards the SUV and SUV-like models, says Amyn Pirani, executive vice-president at Yes Securities. “The craze for a raised stance and the kind of shape that gives a car an SUV feel is in vogue. Therefore, the strategy might work for Maruti. But the formula might not work for all the models,” says Pirani. Maruti launched the Ignis, a compact hatch in 2017 through the Nexa sales channel that is dedicated to premium brands. The model never lived up to company’s expectations and its sales fizzled out in no time — averaging 1,500 units a month. 

By giving it an SUV makeover which includes an imposing front fascia, wide and tough rear appearance and high seating position, rear spoiler and roof rails, Maruti Suzuki is trying to position the facelifted Ignis as the perfect compact urban SUV model. Will buyers give the Ignis a second chance? “A new car is like a new movie, if it doesn’t catch the fancy in the first few days, it’s a flop,” says an analyst. Rohit Kumar, vice-president, Hansa Research Group, says Maruti’s strategy of giving its cars an SUV look and feel is “smart way of future proofing” its vehicles amid growing competition.

Not everyone agrees. “Tagging it as an SUV could make it tough to sell the vehicle. SUVs make more sense over Rs 10 lakh. Below that, it’s a case of over commitment and under delivery,” says Puneet Gupta, associate director at I.H.S Markit, a sales forecasting and market research firm. When one markets a car like an Ignis as an SUV, the acceptability among the buyers to that marketing pitch may not be as positive as it would be for regular compact SUVs such as the Seltos, Venue or a Brezza. Maruti’s strength lies in premium hatches, points out Gupta and the company “shouldn’t lose focus”.

On his part, Raman defends the strategy. "It is in line with the changing market needs,” he says. 

Mind you, this is not a knee-jerk reaction on Maruti's part. When its team was conceptualising new design ideas in 2016, it wondered whether to take the Alto K 10 route or have a completely new design with an SUV bent. Given the rapid shift in buyer preference towards SUVs, the team went with the second choice.

The share of SUVs in the passenger vehicle pie had grown from 25 per cent in fiscal 2016-17 against 21 per cent a year earlier, while sales had jumped 30 per cent year-on-year to 761,997 units.

Cut to the present, the trend has only gained traction and reinforced the faith of Maruti and other automakers in the SUV segment. Even though the broader passenger vehicle market has been in a reverse gear, it’s apparent SUVs have bucked the trend. (see chart)

Utility vehicles sales in India advanced 6 per cent to 810,640 units in the first 10 months of the current fiscal. This was when overall passenger vehicles market fell 17.8 per cent to 2.3 million units over the same period a year ago, according to the Society of Indian Automobiles Manufacturers (SIAM). Looks like the small car master is all set to ride  the SUV storm sweeping the market.