A CONVERSATION WITH IIMB STUDENTS

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A bunch of students from IIM Bangalore wanted my opinion about Maruti Udyog and the Auto industry for a project they were working on. I had a chat with them for around 15 minutes and answered to a few questions they had. This had happened nearly 3 weeks ago, but I could not post it here since I was travelling then. I don't remember the exact set of questions and answers, but here is an approximate transcript. So some questions/answers might have deviated from the original conversation and this is a best effort to put whatever I remember.

Q: What are the reasons for the success of Swift?
A: Swift was priced right. It found a small gap that existed between all the B segment cars(That is, Zen, Wagon R, Santro) and the next level. It was pitched at the level of Getz but would cost much less. And Maruti always has a loyal set of customer who would rather upgrade to a Maruti. And it is a good product and is good looking, which helped the success of Swift.

Q: The question was about Baleno, Esteem and such dated models
A: Maruti badly needs a replacement in this segment. They have a big bunch of loyal customers who would rather upgrade to a Maruti instead of shifting to some other make. But the existing dated models are a deterrent and Maruti really needs a new car in this segment. A radical change in Baleno(something similar to what they did with Honda City) would really help.

Q: Why does Maruti have a loyal band of customers?
A: Primarily because of they have great service. And their service network is vast which really helps.

There were a few more things that we discussed but this is as much I could recall.