Maruti to drive deep into small towns via Arena Satellite showrooms

Maruti Suzuki India (MSIL) plans to open new Arena Satellite showrooms as the country’s largest carmaker aims to tap small towns and new markets, said a senior company executive, amid signs of recovery in rural demand and an approaching festival season.

Senior executive officer for marketing and sales MSIL, Partho Banerjee, told Business Standard the company was aiming to penetrate deeper into markets and reach closer to its customers.

“We have already had a concept of mobile showrooms in the Arena channel.

"We are testing markets and wherever we see potential, we can plan these satellite showrooms – Arena Satellite,” Banerjee said. Arena Satellites would be smaller than Arena showrooms.

He said they would work on each state separately as it is unlikely to work out as a pan-India strategy.

MSIL will now have Arena and Nexa showrooms, besides Nexa Studio and Arena Satellite showrooms for relatively small towns or more remote pin codes.

Nexa is for more premium offerings from the company, while Arena is for all other models.

Noting that there is no real divide between urban and rural in the digital era, Banerjee said in the Tier-II and Tier-III cities, there is an affinity for hatchbacks.

Last month, MSIL said it was planning a new showroom line called Nexa Studio that will cater to the country’s Tier-II and Tier-III cities.

Nexa Studio will be smaller in size than the usual Nexa showrooms and have service workshops and spare parts areas in them.

A total of 100 Nexa Studio dealerships will be opened by March 31 next year.

Nexa Studios will have two cars on display, one delivery area, one workshop bay, and a customer lounge.

The idea is to extend the Nexa experience to customers in smaller cities like Kolar in Karnataka, Gohana in Haryana, Hathras in Uttar Pradesh, and Paonta Sahib in Himachal Pradesh.

MSIL has been in an expansion mode with its dealership presence and added 119 Nexa outlets between April 1 and August 23 this year, taking its overall Nexa count to 500.

It has around 3,925 outlets across 2,577 towns and cities covering Nexa and Arena.

"By the end of this financial year, we plan to open 50 more Nexa outlets, taking their total number to 550.

"Moreover, by March 31 next year, we will open 100 Nexa Studio outlets.

"This implies that one new Nexa Studio would be inaugurated on almost every working day of the second half of this financial year," Banerjee said last month.

MSIL started its Nexa showroom line in August 2015.

As of March 31, it had 495 commercial outlets apart from Nexa and Arena showrooms.

In the first quarter of FY25, the company sold 427,000 units, recording a 1.2 per cent growth year-on-year, according to its majority shareholder Suzuki Motor Corporation.

Sales of domestic passenger vehicles (PVs) by automobile companies in August dropped 2-3 per cent year-on-year (Y-o-Y) to about 355,000 units, owing to low demand and firms reducing production to ease pressure on dealers who hold high unsold inventories.

This is the second consecutive month when PV wholesales have dropped due to low demand and high dealer stocks.

In July, PV sales were down 2.5 per cent Y-o-Y to 341,510 units.

MSIL reduced its dispatches to dealers by about 13,000 units in August.

The wholesales of MSIL stood at 143,075 units, a drop of 8.4 per cent Y-o-Y.

Banerjee said MSIL’s dealers at the beginning of August held stocks to cover sales of up to 38 days.

This has been reduced to 36 days now.

August domestic wholesales of the PV industry would be around 350,000-355,000 units.

In August last year, domestic wholesales stood at about 361,000 units.