Premium retail channel strategy which targets young India with high-on-value products and a dynamic showroom experience is paying off in spades; FY2023’s first 11-months’ sales best yet; Jimny five-door and Fronx set to join the party.
25 Mar 2023 | 30500 Views | By Ajit Dalvi
Maruti Suzuki India has announced that its premium Nexa retail sales channel has driven past the cumulative 2-million-unit sales mark in India. The milestone, which would have been notched in the first few days of March 2023, comes a little less than eight years after the carmaker kicked off the ...
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Maruti Suzuki India has announced that its premium Nexa retail sales channel has driven past the cumulative 2-million-unit sales mark in India. The milestone, which would have been notched in the first few days of March 2023, comes a little less than eight years after the carmaker kicked off the Nexa initiative on July 23, 2015 followed by the launch of its first Nexa model – the S-Cross – on August 5, 2015.
Since then, the carmaker has launched four other models – which constitute two hatchbacks (Baleno, Ignis), one sedan (Ciaz) and two SUVs (XL6, Grand Vitara). Two other models – the Jimmy five-door SUV and the Fronx hatchback – are slated for launch soon.
Nexa operates separately from the regular Maruti Arena channel, which retails the other nine Maruti Suzuki models (Alto, S-Presso, Celerio, Wagon R, Swift, Dzire, Vitara Brezza, Ertiga, Eeco), differentiating itself as a premium, higher-priced offering with all the bells and whistles, with a heightened focus on customer satisfaction.
For Maruti Suzuki, Nexa was a strategic move to diversify its retail offering in terms of value and target a new emerging segment of customers with changing preferences – Young India. Clearly, the differentiating sales strategy has paid off handsomely. From 68,774 units and a 5.87% share of Maruti Suzuki’s total PV sales of 11,70,702 units in FY2016, Nexa’s contribution jumped to 19.16% in FY2022 – 255,253 units out of 13,31,558 PVs. In the first 11 months of FY2023, a total of 338,120 Nexa cars have been sold, contributing 23% to total PV sales of 14,74,109 units. Importantly, in what is a sign that the differentiating strategy has been spot-on, nearly 50% of Nexa customers are under 35 years old and a very high percentage of them being first-time car buyers.
Number-crunching Nexa numbers
A quick number-crunching exercise of Nexa sales since July 2015 reveals that an estimated 19,93,977 units have been sold till end-February 2023, just 6,023 units shy of the 20 lakh or 2-million milestone and which would have been surpassed in the first few days of March 2023 (see data table above).
In terms of fiscal year sales, Nexa numbers have already hit their highest yet – 338,120 units in the first 11 months of FY2023 with March 2023 sales yet to be logged in. This beats the previous best of 332,465 units in FY2019. Sales had declined for the next three fiscals but that can be put down to the Covid-induced lack of demand. Clearly, demand has bounced back and how.
Of the six Nexa models (five now, with the S-Cross being pulled out of the market in August 2022), the stylish Baleno hatchback has gone home to a total of 12,47,089 buyers and commands 62.54% of total Nexa sales. The Baleno, which crossed a million sales in in November 2021, is likely to surpass 200,000-unit sales mark in FY2023, albeit this will still be below its best-yet of 212,330 units in FY2019.
The Ignis, with 241,539 units, has a 12% share of Nexa sales till date. Launched in January 2017, the Ignis has clocked sales of 57,092 units in the April 2022-February 2023 period, bettering its previous best of 47,222 units in FY2018.
The third highest contributor to Nexa sales is the Ciaz sedan with 173,371 units and an 8.69% share albeit sales have slowed considerably over the past few years. From 58,913 units in FY2018 to 13,852 in FY2022, it’s been quite a climbdown. First 11-month sales in FY2023 are 15,869 units.
In October 2022, Maruti Suzuki, which has the largest portfolio of CNG cars in India, expanded its factory-fitted CNG offerings to Nexa and the Baleno and XL6. In January 2023, the recently launched Grand Vitara also got the CNG treatment.
The Grand Vitara SUV, launched in September 2022 and voted the Autocar Car of the Year, has already sold 41,270 units in a scant six months and already accounts for 2% of Nexa sales.
Bookings for the Jimny 5-door and Fronx SUVs have crossed the 38,000-units mark and counting.
The Nexa story is set to get even bigger, what with the Jimny 5-door SUV (which has already received over 22,000 bookings) and the Fronx (which is seen over 16,000-plus bookings) set to join the party when they are launched later this year.
Pampering the customer
It can be said that Nexa ushered in a new car showroom dynamic in India, starting with a monochrome black-and-white theme with the entire lighting spotlighting the product. High levels of hospitality and pampering of the customer with specially designed cubicles and separate seating areas earmarked to ensure privacy was quite a differentiator from regular retail outlets at the time. What’s more, back in 2015, Nexa provided a digital experience with iPads and a paperless environment – things which are de rigueur now. In January 2020, Nexa launched its augmented reality showroom, which enables customers to explore Nexa cars in a digitalised format.
From 40 outlets at the time of the premium retail channel’s opening in July 2015, Nexa now has over 440 showrooms in 280 cities across the country. This has ensured ample reach in the farthest regions of India – in fact, rural India is also warming up to Nexa, which is also seeing strong demand from town and country.
A Nexa service facility. In September 2021, Maruti Suzuki launched an industry-first AI-based 24x7 scan and voice-enabled virtual car assistant app called ‘S-Assist’ for Nexa customers, providing an immersive online post-purchase experience.
Speaking on Nexa’s 2-million milestone, Shashank Srivastava, Senior Executive Officer, Marketing & Sales, Maruti Suzuki India, said, “NEXA was conceptualised in 2015 with a philosophy of providing unique experiences, along with innovative and intelligent technology through a diverse product portfolio. Reaching the 2 million sales milestone is a testimony of customer's love for our hi-tech and feature-packed offerings and premium experiences. NEXA has contributed to more than 20% of total Maruti Suzuki sales and the numbers are going strong. With the recent unveiling of two new SUVs – Jimny and Fronx – the NEXA portfolio looks stronger than ever. Both have garnered combined booking numbers of over 38,000 units. We’re confident that the NEXA channel is poised for greater success in the upcoming year.”
Given the accelerating demand for Nexa cars and SUVs, the Jimny and Fronx soon expanding the portfolio as well as the upcoming Innova Hycross alternative, Maruti Suzuki, the PV market leader, is now confident of brand Nexa taking a shot at the No. 2 position, currently held by Hyundai Motor India, which in turn has Tata Motors hot on its heels. Both Hyundai and Tata are set to record their best-ever sales in a fiscal in FY2023 – over 500,000 units. Nexa, which is likely to close FY2023 with record sales in the region of 375,000 units, will have to achieve year-on-year growth of over 60% to hit the 600,000-units mark in FY2024. Clearly, an exciting battle is in store in the booming Indian passenger vehicle industry.
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