For the past few weeks, Maruti Suzuki managing director Jagdish Khattar has been visiting many of his over 120 key vendors. He has also been meeting main dealers and even the shop-floor workers in his factories. All these meetings have been held to convey a simple message: pull out all stops to boost sales.
Maruti, much like other car makers, has been struggling to maintain growth momentum in a market where high finance costs are affecting many of its flagship brands. Realising that a bearish market sentiment could play havoc with its retail sales, the company has begun thinking of novel ways to generate extra sales.
Khattar said over the past two-and-a-half months, the combined pool of vendors, dealers, business associates such as companies that provide insurance to Maruti cars and shop-floor employees have helped him generate incremental sales of over 22,000 units.
"We realised at the beginning of this year that the market was likely to be impacted by the increase in finance costs. These initiatives have been charted out to spur sales and they seem to be working satisfactorily," he said.
For example, dealers and vendors of Maruti have been encouraged to incentivise their own employees by giving them cars; Maruti’s shop-floor workers are being offered between Rs 1,000 and Rs 1,500 as incentive for making referrals that translate into sales.
Under "Wheels of India" scheme, the company has sold over 1500 cars to
government officials over the past two months whereas almost 7,000 have been sold due to employee referrals over the same period. But is generating sales through innovative schemes enough for Maruti to maintain its lead in the passenger car market?
In the latest annual report, Khattar himself has acknowledged that a
major challenge before the company is keeping costs under check. Besides, Maruti’s overwhelming dependence on the domestic market could also cause concern.
"With competition hotting up, stringent automotive regulations and high customer expectations, there is a likelihood of increase in costs, putting pressure on the company’s margins. Increase in commodity prices puts further pressure," Khattar said.
Maruti, much like other car makers, has been struggling to maintain growth momentum in a market where high finance costs are affecting many of its flagship brands. Realising that a bearish market sentiment could play havoc with its retail sales, the company has begun thinking of novel ways to generate extra sales.
Khattar said over the past two-and-a-half months, the combined pool of vendors, dealers, business associates such as companies that provide insurance to Maruti cars and shop-floor employees have helped him generate incremental sales of over 22,000 units.
"We realised at the beginning of this year that the market was likely to be impacted by the increase in finance costs. These initiatives have been charted out to spur sales and they seem to be working satisfactorily," he said.
For example, dealers and vendors of Maruti have been encouraged to incentivise their own employees by giving them cars; Maruti’s shop-floor workers are being offered between Rs 1,000 and Rs 1,500 as incentive for making referrals that translate into sales.
Under "Wheels of India" scheme, the company has sold over 1500 cars to
government officials over the past two months whereas almost 7,000 have been sold due to employee referrals over the same period. But is generating sales through innovative schemes enough for Maruti to maintain its lead in the passenger car market?
In the latest annual report, Khattar himself has acknowledged that a
major challenge before the company is keeping costs under check. Besides, Maruti’s overwhelming dependence on the domestic market could also cause concern.
"With competition hotting up, stringent automotive regulations and high customer expectations, there is a likelihood of increase in costs, putting pressure on the company’s margins. Increase in commodity prices puts further pressure," Khattar said.
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