Maruti Udyog Ltd can introduce new models in, both, the small car and mid-size segments in 12 to 14 months as they are ready in Japan, said RSSLN Bhaskarudu, managing director of the company.
The car company has decided not to go in for the completely knocked down kits (CKD) route to bring in the new models early, but is working with vendors to achieve over 60 per cent indigenisation before launch.
While ruling out the possibility of the company going in for the CKD route for the new models, Bhaskarudu said since many of the company's vendors are joint ventures with Suzuki Motor Corporation's vendors in Japan, the work on new models could be simultaneously started by both the company and the vendors once a decision on new models is taken.
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Bhaskarudu, however, pointed out that the company has upgraded all its models only recently and therefore does not feel the need for going in for new models immediately.
"Each model has a certain life period. Besides, our new models are well accepted by the market. Therefore, there is no necessity for the company to launch new models immediately," he said, adding that "we will take a decision on introducing new models at an appropriate time".
Apparently, the MUL strategy is to come out with its new models when its competitors' models become `old'.
Even after considering the investments for its new plant, MUL will still have the advantage of having the lowest capital cost compared with the new entrants in this sector. Along with the advantage of having a range of models to back upon, the company will have ample room for strategic pricing for its new models as and when they are introduced.
When asked about the increasing competition in the small car segment, which has been the main forte of MUL, Bhaskarudu said Maruti cars are time-tested and backed by the superior Suzuki technology. Besides, the company has built up a wide network for after-sales and servicing which will keep the company. in good stead.
He, however, admitted that the company expects a fall in its market share in this segment by about 30 to 35 per cent.
According to industry observers, MUL will have enough time to take decisions on introduction of new models since customers generally wait and watch the performance of the new models being launched in the market for a certain period before taking decisions on buying. Besides, the customers will also assess the after-sales service and spare parts availability and prices before making decisions on their purchases.
MUL can utilise this intervening period to further build up its current strengths of a wide after-sales and servicing network.
By this, MUL can ensure a big gap between the company and its competitors in terms of the servicing network, which ultimately will ensure the success of any car manufacturer.