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Shashank Shrivastava: New players in the small-car segment to make auto space more competitive
In 2011, from the product point of view, we will be entering the large-car segment for the first time in our history. Since Maruti is primarily a small-car maker we are very excited about how to position the vehicle in a market, which is majorly made up of small-car buyers.
Entering the large car market is going to be challenging for us. With the advent of new players in the small-car segment, the auto industry will be much more competitive. So our free run in the area would end and retaining the market share will be a challenge.
Third is the media front. Media, right now, is very cluttered therefore we will be taking initiatives on the digital marketing side. We expect digital to become very big because consumers are getting younger and their preferred media is digital.
So far we have only used traditional media that we will, of course, continue to use. But this year we will also utilise social media, mobile marketing and make use of the advent of 3G along with the younger audience, which is a good mix.
As far as the auto-industry is concerned you might see higher inflation because of the growth rate. Interest rates are also expected to go up resulting in expensive auto car loans.
Also, when economy heats up the commodity prices are also expected to go up which will result in increased raw material cost. Raw material accounts for almost 80 per cent of the cost and therefore the pressure on margins will be high.
The consumer is getting younger. Five years ago, the average age of a consumer was 38-39 years, today it is 32-33 years. Marketing the product to a population that is getting younger should be exciting as well as challenging. You have to keep a track of their preferences. As the consumer gets younger and the economy grows, the segmentation of cars will also increase. For instance you will see the emergence of vehicles in categories like weekends, city and touring.