Maruti Suzuki: SX4 redux

Within the first three months of its launch in 2007, the Maruti Suzuki SX4 had overtaken the then Honda City to become the market leader in its segment. Two years hence, the situation is rather different. Today, the Honda City has recovered lost volumes. And Maruti Suzuki’s very own Swift Dzire is the leader in the segment. And all of this has been at the cost of the SX4, once the darling of its segment. So what went wrong, and why has Maruti Suzuki re-launched the SX4?

There are two stories to the tale. One revolves around meeting the impending Bharat Stage-IV norms beginning April 1, 2010. The other is to infuse life in a car that is being attacked from all sides. So the company has gone ahead and spruced up the interiors, changed the grille and even added the option of a 4-speed automatic to take on the Honda City automatic. Says Maruti Suzuki Executive Officer (marketing & sales) Mayank Pareek: “The new SX4 with its range of contemporary features is sure to win hearts.” But will it?

For starters, the SX4 automatic is priced at Rs 8.02 lakh (ex-showroom, Delhi), while the Honda City is nearly Rs 1.5 lakh dearer. The only other automatic option that comes close is the Hyundai Verna diesel at Rs 8.66 lakh. Given these considerations, the automatic could stand to add some volume to the SX4. So far, the SX4 has been selling at an average of 1,200 units a month, while the Honda City averages around 4500 units a month. So the SX4 still has a lot of catching up to do. But it won’t be easy, given the lack of a diesel engine in its lineup.

This is where the Swift Dzire has managed to rake in the volumes. Its premium variants have stolen away some of the magic of the entry-level variants of the SX4, while the option of a diesel engine has meant that the Dzire averages in excess of 6,000 units a month. For Maruti Suzuki, the idea of creating two products that deliver great value at nearly similar prices led to the SX4 volumes taking a plunge. The company also doesn’t intend to offer a diesel engine option in the near future, since its only diesel engine, the 1.3 Multijet, is being shared between the Swift, Ritz and Dzire, and it can’t seem to satisfy demands in these segments.

So, until then, it will have to leave the new SX4 to fend for its survival in a segment that will see new launches in 2010 from Volkswagen, Nissan and Toyota. But given Maruti Suzuki’s strategy to become more visible as more than just a hatchback maker, it will try to give it all to ensure the SX4 can become successful once again.