Kwid me not

Small cars in India are synonymous with Maruti. And why not, after all Suzuki has built its fortune selling small cars around the world. Unlike other Japanese carmakers such as Toyota and Honda, India has been a very important market for Suzuki because of the huge demand for small cars. As a philosophy, Suzuki has relentlessly focused on cutting costs and deriving economies of scale in procurement. India has been a big contributor and Maruti’s high level of indigenisation has given it an edge in getting the price right.  

Only after some 15 years did Maruti see its first credible competitor when Hyundai challenged the behemoth on its turf with Santro and it did very well for many years. Tata’s Indica, which combined unbeatable space and fuel economy, was a roaring success, too, leading sales in the category for many years. 

While others have made little headway in small cars, even Hyundai and Tata have not been able to scale-up the way Maruti has, in terms of either product portfolio or distribution strength. Yes, India is a challenging market with buyers demanding not just good design and build quality, but also a ‘cheap’ price. That’s the reason why very few players have cracked this equation. 

After a long time, we have a credible challenger in the segment — a small car from
Renault. It is- taking the next step to build on the initial success by quickly launching variants and ramping up distribution. Its twin, Nissan, has just launched its own version which is cheaper but Nissan faces a huge challenge given that it has hardly any recall in India.Datsun, the brand under which it sells small cars, is even less familiar to the local audience. Can the two companies really face up to the small car challenge is the subject of this issue’s cover story.     

In other stories, we have a piece on Reliance, which has unsurprisingly launched Jio with disruptive tariff plans. Back in 2003, when Reliance did something similar, it caused a lot of collateral damage and suffered some itself. Is it better prepared this time? Or are its rivals any wiser?