30 Jun 2017 17:42 IST

God of small cars

The secret of Alto’s success

Alto could be called the God of small cars. We Indians simply love this four wheeler from Maruti Suzuki. For 13 years now, it has been India’s top selling brand.

A recent report in BusinessLine said this:

Launched as ‘India’s hottest little car’, Alto crossed the one-lakh cumulative sales mark in its first three years of existence (October 2003) and has never looked back since. The five-lakh mark was achieved in August 2006 while the million followed in November 2008. Four years later came the second million sales feat in April 2012.

In February 2016, Alto reached the three-million cumulative sales mark and by March-end this year, this had grown to 3.25 million. In monthly terms, this translates into average sales of 22,000 plus Altos over the past decade.

The small car performed well despite not having been upgraded for four years, from 2012-2016. Last year, a new version of Alto 800 was unveiled. It was cheaper, and had more features, including a driver-side airbag in one of the variants.

Alto turned Alto 800 in 2014, after Maruti Suzuki stopped producing its iconic 800 model.

Staying successful

Alto has proven to be more than a credible successor. But how did Maruti manage to keep a decade-old model relevant at a time when consumer tastes are changing at the drop of a hat?

And the passenger car market, today worth 3 million units a year, has dramatically changed. From 41.7 per cent in 1996, the share of entry-level small cars has shrunk to 8.2 per cent of the overall car market.

Some of Alto’s peers, especially Renault’s Kwid, have done exceptionally well. But as an anecdote narrated by a business magazine showed, even if people preferred its peers when it came to design or performance, many customers eventually ended up buying Alto 800.

Extensive network

The main reason was Maruti’s extensive network. One doesn’t have to travel too far to come across one of the company’s service centres. Also, the customer still firmly believes that Maruti vehicles are ‘low-maintenance’. This matters a lot to customers who are graduating from a two-wheeler to a four-wheeler.

The company’s models also dominate the second-hand car market. Four million second hand cars were bought and sold in India in 2016. Of this, 7.3 per cent were Alto, which had the second largest market share. The most popular car in this segment is its company peer, Swift.

Women swoon when it comes to Alto. The car is especially popular among women who have just taken up driving, and it helps that Maruti introduced the automatic Alto K10. Look at any of the car portals, and this model ranks either first or second for being popular with women.

Numbered days?

But its peers are not just standing still, green with envy. Going forward, companies like Renault and Hyundai plan to be more aggressive in the entry level segment. Moreover, experts expect prices of these cars to increase as they would need to include more safety standards from the base model onwards. And with consumers becoming aspirational, the tendency is towards higher priced models with more room, features and better looks.

Does it mean that days of Alto are numbered? Not any time soon. Look at the number of two-wheelers in India — there are 17 million of them! As the BusinessLine story said, even if 10 per cent, or 5 per cent of them graduate to a four-wheeler every year, that is quite a big number to cater to.

Maruti will have to keep reinventing its best-selling model.