The dealership dilemma - NEXA and Maruti Suzuki

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To build brand image and to woo buyers for their premium offering Maruti Suzuki decided to sell certain models / brands through their Nexa dealers. But strategy of offering so called premium products through NEXA seems like not working well with Maruti.

It looks like Maruti itself is in dilemma as to which product they sell through Nexa and which product through Maruti Suzuki.

With the latest news of Vitara being sold through Maruti Suzuki dealership and not through Nexa to reach to the larger customer base and to compete Hyundai Creta more aggressively is really not in line with Maruti's strategy and this may not go well with NEXA dealers also who thought to make good profits from capable product from Maruti stable.

Also there are news that Nexa dealers are offering huge and unbelievable discounts of upto Rs.5L on S-Cross to clear the stock so this is another new low for the Nexa dealers.

Maruti have offered BALENO Hatch through Nexa which competes with it's own sibling SWIFT but it's reach have become limited to the consumers who have access to the NEXA dealers.

Baleno being positioned as premium hatch but the starting price is in line with SWIFT which again confuses Maruti's plan with respect to the selection of product that Maruti is willing to sell through NEXA.

The way Maruti is handling NEXA and exclusive products that are sold through NEXA confuses consumers as well as the dealers who owns NEXA.

Instead of being selective about products offered through NEXA and Maruti Suzuki Dealership, Maruti should sell it's all "premium offering" such as CIAZ , SWIFT , SWFT Dzire , ERTIGA, BALENO , VITARA , S-CROSS etc... through both Nexa and Maruti Suzuki Dealers.

This will help NEXA dealers to invite more premium consumers in their showrooms and it will also help Maruti to gradually develop NEXA as platform of Maruti to sell it's premium products.

By offering products such as BALENO and S-Cross through Maruti Suzuki dealership will help Maruti to reach to very large customer base as well as will help to clear stock of slow moving product such as S-Cross.

In this way Maruti will be able to sell it's premium offering to the consumers who have access to NEXA as well as to the consumers who do not have access to NEXA dealership.

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It should not be about PREMIUM OFFERINGS from Maruti at NEXA , it should be about offering Maruti to the PREMIUM PEOPLE through NEXA.

NEXA has been a waste of money , the SCross is beyond PREMIUM , it is stupidity rolling on 4 wheels , a BAD PRODUCT for the NEW NEXA

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@Laibrankur - You are correct Maruti started NEXA for "Premium Buyer" but Maruti failed to do justice to NEXA by offering very limited products through NEXA.

INstead of S-Cross Maruti should have started selling "Kizashi" and "Ciaz" through NEXA.

NEXA is a good concept by Maruti but the way they are handling is not clear.

I feel that S-Cross has it's own followers but because it is not reached to large customer base it looks like it is failed. I still believe if Maruti promote S-Cross aggressively it will find decent number of buyers.

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Adding to what already has been discussed.

When S-Cross was launched via Nexa, the salesperson were very humble as the product was not selling.

Now it's just opposite due to success of Baleno, just try to visit any Nexa showroom and you will find same set of people as one of the most arrogant you can come across.

So dealership experience is just a one time affair for a person buying a car, the product and service experience is the one he/she goes through every time. Sadly Nexa doesn't address these 2 critical parameters.

Edited by sachins

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Right from the beginning, I am against Nexa. Simple reason being that a car buyer today is more informed about the product, the features and the drawbacks of each and every competing car. The buyer is more informed in the case of high value model buys. All special TV programs, special magazines, net savvy data sites etc., are helping the prospective buyers to be more informed about the products on offer. More often than not, the sellers - the salesmen, the counter staff, the front desk - is NOT competent to answer all the questions asked by such informed buyers. In such a scenario, I wonder whether NEXA's staff are well equipped ?

If not, what is the difference between any other showroom and a NEXA showroom ?

Maintaining two channels is not going to be easy for any organisation. More so, if it is product-centric. Why segmentalise the customers ? Who would like to buy a higher-end product from a regular showroom if Maruti itself is indicating that it is not a premium product ? Poor strategy.

It is hightime that NEXA branding must be abolished. Now a days, even the entry level cars are turning out to be premium. Anyway, just because you have a NEXA showroom, will a BMW or a MB customer will come to it and buy a Maruti ?

Silly logic, ab initio.

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As part of my hobby i flip cars and am mostly taken into confidence when people around me, known to me and their acquaintances need to buy a new car.

So believe you me when i say , its the only way you can bring in a premium customer into your store.

They like to be waited upon , be well seated in an exclusive lounge areas, sipping a hot beverage in china ware and make out full payments in advance , over light music .

After picturing this , picture a crowded store , will people staring you and your teenaged kids for the way you are dressed and those stares last till the time you are at the place, where people are shouting at sales reps for misselling or an increased EMI than the one promised or the bloody mud flap / foot mat which did not find its place into their cars

How many of you will like to buy from such a place or take your kids along

These cars are not meant for themselves but for their kids who are starting to learn to drive , they dont wont them to bang their beemers or the mercs , whose scratch repairs alone cost more than these cars we are talking about , nor do they want old second hand cars for them , they want the top specked versions with all safety equipment , which makes them easier to migrate to their actual first swanky cars worthy of their garages.

Also these cars are for their maids , to run errands between their farmhouses and city homes , when they themselves are not travelling along, their dogs outings to the vet

These are the typical requests that i have personally come across from these kind of people , the test cars can be brought to their homes but their they cant see the other colours on offer in flesh , further they say they dont even want to see the car if its going to be crowded at the showroom.

Have bought a many Cretas, Dusters , Scorpios and Corollas to do just that for these people.

I mean everyone like a good shopping experience , you dont need to know everything , nor does the sales rep , though he should, but their are ways to do it right.

NEXA can only survive if it has the entire range of products for those select few who crave for the shopping experience more than the product being shopped.

A fine dine resturant so to speak , where people go to get served the EXPERIENCE and the actual meal is so small in portion , at home you have more starters than the meals at some of these fancy resturants but you get the bragging rights of such a wonderfull meal you had with all the selfies you put up on your social network accounts.

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Maruti may not be able to offer that shopping experience that Merc / BMW is providing but atleast they can pamper customer's "EGO" by bifurcating which product is high-end product and which is not from the Maruti through the NEXA channel.

Maruti already have come out of it's image of being tagged as a small car manufacturer. It has products such as SWIFT , ERTIGA , CIAZ , Baleno etc... that are at par or better than any other car in similar category.

NEXA is a good channel through which Maruti can differentiate and identify products that fall into category which is above VFM.

Instead of being very selective Maruti should define products that can be sold through NEXA and the same products should also be made available at Maruti Suzuki Dealership so that buyers who do not have access to NEXA can also buy high-end products from Maruti.

Products such as Alto , WagonR, WagonR+(Expected to launch at AutoExpo 2016), Celerio , EECO , OMNI should be offered exclusively at Maruti Suzuki dealership and not at NEXA along with other high-end products.

And products such as Swift , Ciaz , Baleno , S-Cross, Vitara, Kizashi , Ertiga etc... should be sold at NEXA as well as at Maruti Suzuki dealership. By this way Maruti will be able to bring clarity to the dealers about products that will be sold through their dealership.

So if a dealer chooses to open "Maruti Suzuki Dealership" he will have access to all the products offered by Maruti i.e. VFM as well as high-end and if dealer chooses to open NEXA dealership he will have access to only high-end products from Maruti stable.

By this way customers who are "snobbish" or want a different experience and don't want to experience crowded Maruti Suzuki showroom but want to buy a high-end Maruti product can visit NEXA where he/she will have similar consumers who have come to buy a high-end Maruti product only.

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Is Maruti selling high-end cars at different prices in ordinary showrooms and in Nexa showrooms ?

If they are selling the same product, at different rates, in the same city, it becomes a problem. No one would buy

in the Nexa showrooms. Same product - why would any sane fellow will pay more ?

If they are selling at the same price, then, why would a dealer invest so much money in the up-scale showroom,

in having better informed staff and in giving extreme personalised service to only a handful of customers ? Are

the margins given to the Nexa dealers different ? If not, why would anyone open a Nexa showroom in the same

city which almost certainly would have had more than one or two Maruti showrooms ?

What about the service charges and the service set ups at these Nexa showrooms ? Do they have different

service standards and procedures at these high end showrooms ?

What if a customer bought a high car from a Nexa showroom and approaches a regular showroom for either

regular service or a breakdown service, will he be treated differently ? Only because, he bought his car from a

Nexa showroom ? What if on the same day, two customers get similar high end cars to the regular showroom

for service - one bought from Nexa and another from the same regular showroom - will they be charged differently ?

If these financial issues are not clear, both for the customer and the dealer, they are dealing in doubt and

ambiguity. And, no business will succeed when you have scope for such doubts and ambiguities.

I do not own any Maruti product now. I own a Mahindra Xylo (E8, seven seater - Feb 2009 - the very first batch).

Mahindras have exclusive service centre for XUV500 in Hyderabad (Uppal area). But, when I took my Xylo there,

for a regular paid service, they have accepted it and charged normal rates. And, the service was very prompt,

courteous and better. I am very happy for that service. Partly because it was prompt and better but mostly due to

they charging the same rates as a normal Mahindra service centre would.

Is the same situation prevalent in Nexa service centres ?

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NEXA successfully created a barrier and pushed sales of BALENO something a normal showroom would not have achieved.

Swift and Baleno would have eaten into each others sales

Having NEXA isolated one product from another and thus improves sales.

Look it as a BUSINESS STRATEGY and everything will fall in place.

Even then a bad product can have no place to hide be it in any format.

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Heard somewhere that Baleno was initially headed towards regular Maruti showrooms and Vitara Brezza to Nexa.

However, poor sales of S-Cross meant that in order to keep Nexa outlets alive they launched Baleno via Nexa.

So now it's turn of regular Maruti showrooms to get a pie of new products (Brezza).

BTW, most Nexa outlets are owned by people who already have existing Maruti showrooms.

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I see lot of potential in S-Cross but somehow it is not attracting required number of buyers.

I have seen couple of S-Cross in Grey and Black colour and they look great with smart set of alloys.

S-Cross is a good option for the buyers who do not want to go for a Sedan or SUV but wants a premium product with strong engine, big boot , big cabin and rock solid reliability.

@Rameshbabu - It is not about quoting different pricing but it is about making a product accessible to customers and gradually making a clear difference between products as premium product or non-premium product.

To gain more acceptance of "SUZUKI" brand among premium buyers it is very important for Maruti Suzuki to clearly identify premium and non-premium products.

If Maruti chose to offer Vitara Breeza through NEXA it would have automatically identified as a "Premium Product". So it's a simple formula for Maruti that whatever offered through NEXA will be identified as "Premium" product.

Because NEXA dealerships are limited in number, if Maruti allows NEXA products (S-Corss and Baleno etc...) to get offered through Maruti Suzuki dealership than it will be win win situation for both the buyers as well as to Maruti Suzuki.

And since at this NEXA has very limited products to offer i.e. S-Cross and Baleno so if Maruti allows it's "Premium Products" such as CIAZ, SWIFT RS , Vitara Breeza, Ertiga etc.. through NEXA than it will help NEXA dealers to stand strong and earn more profits by offering more "Premium" products from Maruti's stable.

By identifying clearly Premium and Non-Premium products and after getting required number of NEXA dealership at strategic locations across the country Maruti Suzuki can clearly define which products to be sold through Maruti Suzuki Dealership and which products to be sold through NEXA dealerships.

Regarding different pricing I feel it is purely upon dealer as well as buyer. Some dealers offer more cash discounts, accessories , insurance benefits etc... and some dealers are least interested in offering discounts or any other benefits. The same rule applies to the buyers as some buyers don't negotiate a lot and some buyers negotiate maximum.

Actual reason for introducing NEXA may not be know to us but as we understand that NEXA is started by Maruti to make a new channel of sales to offer premium products and to make SUZUKI brand acceptable to the premium buyers.

But if Maruti Suzuki fail to differentiate between Premium and Non-Premium Products than it will take longer for Maruti to establish "SUZUKI" brand among premium buyers and NEXA is best possible way to clearly differentiate between premium and non premium products.

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There aren't any premium products for Maruti to sell through NEXA. Maruti is basically testing the waters with NEXA, I pity those guys who own this franchise and don't know how they'll be compensated. Peddling a product through NEXA means automatically lesser numbers as there are lesser showrooms, if you peg the price high then it's brought down by the market forces as a downward revision (S-Cross). I think Maruti needs to concentrate on getting the interiors right, like they have done in the Ciaz and this is sold through the regular dealerships. You can't pass off a funeral black or grey interior as premium in India. Ideal product would be the Swift Sport to start with. Then may be the full fat Kizashi relaunched with all the bells and whistles.

Edited by Durango Dude

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