Shashank Srivastava, Executive Director, Sales and Marketing, Maruti-Suzuki India Limited, explains how the country’s largest carmaker is gradually getting back up to speed

Nobody could have ever predicted that such a month of April would exist in our lifetime because life itself came to a shuddering halt. Travelling on the roads of India’s major urban metropolises seemed like driving through the sets of a zombie film. At one time, while driving on the India Gate C-Hexagon, mine was the only car on the road. A fact that might seem incredible even if it was in the wee hours of the morning, felt much more so during the middle of an ostensibly working day. Things have improved since then, for the overall economy and the automotive industry, in the month of May, as dealerships and workshops started opening. First in upcountry areas and later on in major urban areas as well, sales of new vehicles have restarted. After the historic zero sales figure of April for the entire industry, retail sales in May touched 59,000 vehicles, approximately a tenth of normal.

We spoke with Shashank Srivastava of Maruti-Suzuki to gain some insights into the opening up.

How is the country’s largest carmaker, Maruti-Suzuki coping with the lockdown, the reduced sales and its aftermath?

The process of opening up began on May 5, and out of our 3087 outlets across India over 2,800 are operating now. In May, we sold over 30,000 vehicles and had a marketshare above half the market. We have seen similar trends in bookings as well. But that said, I would be hesitant to read too much into the current situation. It will still take a few months to assess realistic demand as well as for all manufacturers to ramp up production in a post-Covid environment.

Why is it too early to read into trends?

There are lots of uncertain factors, much like the virus itself was at the outset. If tomorrow we discover a miracle vaccine for COVID-19, things could change dramatically. Keep in mind that the discretionary purchases of customers will be impacted by the lockdown and a vehicle is for a majority of customers, a discretionary purchase. April and May were washouts and right now there are varying projections in the market looking forward, so I would adopt a wait and watch viewpoint.

So there are no trends as such we can see in Mid-June?

No, there are some behavioural trends, some of which we have learnt from experience of other economic slowdowns. The first is that customers tend to gravitate towards major brands, they will buy products that they know will work, they become very conservative. In this respect, Maruti-Suzuki does gain. The other trend, again from experience, is that when income levels are stressed, people tend to downgrade the type of car they buy, instead of a compact-sedan they could look at a hatchback. Another trend that I expect to see is an increase of first-time buyers because of the issues with public transportation across the country. However, at the same time, as I indicated earlier, discretionary purchases will get impacted which means that car replacement purchases will come down this year. This is despite there being a strong demand for second-hand cars.

What about institutional and commercial sales?

I would presume that government purchases will be down in the coming months but for many corporate purchases there are prescribed cycles of vehicle replacement which I believe will continue.

Of course, in such times, Maruti-Suzuki will also cut back spends, marketing usually is the first department to be hit. Will that be the case again?

Well, there will certainly be downward pressure on the marketing department, but do not assume that there is no need to spend on marketing. Of course, we would like to maximise our returns from those investments, be it brand activity or demand creation. But there will be spends both on digital media reaching out to particular individuals and in traditional media for reach and frequency.