WagonR: Maruti Suzuki is set to steer its third brand into 2 million club

Reaching a sales milestone of two million units is a feat for any car, especially in a market like India where annual sales are just about three million units. No wonder then that only three vehicles in the passenger car segment have been able to cross this landmark. All the three vehicles belong to Maruti Suzuki, which now sits on a 50 per cent market share. After Maruti800 and Alto, it is now WagonR’s turn to enter this club. And in 2017, even as auto majors rush in with premium brands aimed at the high end of the Indian market, the number of customers buying into a brand that promises functionality, performance and affordability is growing.

 
WagonR, the company’s first tall boy design car, was launched in 1999, a year before the company’s small car Alto made its way into showrooms. It has taken 17 years for WagonR to clock cumulative sales of two million units. Since both WagonR and Alto were launched around the same time and come from the small car segment, one may be tempted to compare the time Alto took to reach two million units in sales. Well, it achieved this milestone in 12 years of its launch, that is, in 2012. And it has also gone ahead to become the first Indian car to reach a volume of three million units. But Alto and WagonR operate at different price points and cater to different consumer groups.

 
WagonR begins at a price of Rs 4.10 lakh and goes up to Rs 5.34 lakh (ex-showroom, Delhi). The Alto begins at Rs 2.45 lakh (for the 800 variant) and goes up to Rs 4.15 lakh for the K10 variant. WagonR has consistently figured in the top five most sold vehicles in the domestic market. In FY17, it was the second most sold passenger vehicle in the country after the Alto by clocking sales of 172,346 units.
 

The numbers convey a sense of the contribution that WagonR makes to Maruti Suzuki. It is the company’s second best-seller and accounted for 12 per cent of the 1.44 million units sold by the company in the domestic market. If WagonR was a standalone car manufacturer, it would have ranked fourth in the domestic market, ahead of players like Honda, Tata Motors and Toyota in volume. A quick back-of-the-envelope calculation shows that WagonR accounts for about Rs 7,500 crore worth of revenue for Maruti.

 
The popularity of this product stems from its utilitarian benefits, practicality, adequate space, easy maneuverability along with the critical element of good mileage. The brand was positioned as a car full of options and the company invested in a series of television commercials that were built on the same proposition. Besides being the first car with a tall boy design, it also happened to be Maruti’s first car offering consumers in the choice of dual fuel in one car, that is, petrol and LPG. Later, the introduction of CNG helped make the car an economical choice for buyers.
 

It is worth pointing out that the unconventional design was not readily accepted by the Indian buyers. But the company tried to communicate the value and uniqueness of this car through a series of brand campaigns. It was positioned as the country’s first multi-activity vehicle. Sales took time to pick up but when it did there was no looking back. From an annual average of 25,000-26,000 units in the initial five years, sales surged to an average of about 110,000 units in the next five years.
 
There was not a single year when sales did not grow YoY during the first decade of WagonR’s journey. The volume of 172,346 in FY17 is yet another record for a single year and numbers have been only going up in last few years in spite of rising models in the market. The car is sold mostly in domestic market while exports are negligible, with just a few thousand units shipped since the launch.

 
“WagonR has sustained its position in the top five models year after year for over a decade in a market where over 18 manufacturers sell more than 100 models. Loyalists have appreciated it for its functionality, utility and tall boy design,” said Tarun Garg, head of marketing at Maruti Suzuki. It is also interesting that in spite of the growing popularity of this car among cab aggregators and taxi operators, demand from individual customers remains strong at over 90 per cent.
 
The company claims that large chunk of buyers fall in the age group of 35 years and below. The contribution of this segment has increased to 40 per cent now from 35 per cent four years ago.

 
Maruti said the company worked to keep WagonR relevant to changing times. Over the past couple of years, it has introduced auto gear shift, anti-lock braking system and dual airbags in this model. In addition, several limited editions have been introduced to keep the brand relevant and interesting.