Maruti Suzuki plans no-frills dealership network for LCVs

Pilot to start in four states this quarter

Maruti Suzuki, which recently set up a premium dealership network for select cars, is set to start pilot for a new sales network to sell light commercial vehicles (LCVs), due for launch early next year. The pilot will roll out during the current quarter in four states.

The proposed network will be a smaller, no-frills set-up without air-conditioning. Most of these will also have a dedicated service station.

“These will be simple functional set-ups to match the profile of an LCV buyer. After the pilot, we will expand the network to cover most Indian states,” said RS Kalsi, executive director, marketing and sales, Maruti Suzuki.

The experiment is being rolled out at one location each in northern, central, eastern and western India.

Unlike the regular Maruti Suzuki outlets, which are spread over an area of up to 2,500 sq ft, the LCV dealerships will have an area of 1,000-1,500 sq ft. Only existing dealers of Maruti Suzuki will be eligible. This will allow them to take advantage of their service and sales network.

Kalsi said the servicing and maintenance of LCVs needed to be done in the minimum time possible because the vehicle was the primary source of revenue for its owner.

In July, Maruti Suzuki had rolled out Nexa, an exclusive dealership network to sell cars. It has set up 80 Nexa outlets so far and plans 100 by the end of the year. Nexa dealerships, too, were open solely for Maruti Suzuki dealers.

The LCV network will be a contrast to what Nexa stands for: premium treatment, sophistication, luxury and style.

Unlike Nexa, for which the workforce was hired from airlines and luxury hotels, the team for the LCV dealerships could be hired from tractor and other LCV dealerships.

Kalsi said Maruti Suzuki would also look at tie-ups with non-banking financial companies and regional cooperative banks to provide financing to LCV buyers. The LCV market is dominated by Tata Motors and Mahindra & Mahindra. Other players include Ashok Leyland and Piaggio Vehicles.

In the April-September period, LCV sales declined by 7.4 per cent to 175,270 vehicles, data from the Society of Indian Automobile Manufacturers showed. This is on top of a 11 per cent decline in the year ended March 31, 2015