Maruti taps home channels to help clear inventory

Armed with record discounts, the initiative is aimed at offering additional incentives of about Rs 5,000 to Rs 20,000 to employees of over 800-1,000 companies associated with it.

Mumbai: Faced with a record inventory and a sluggish demand climate, Maruti Suzuki, the country’s largest carmaker, has approached its stakeholders — dealers, vendors, parts distributors and marketing agencies – with a “Hum Saath Saath Hain” campaign to sell its stock.

Armed with record discounts, the initiative is aimed at offering additional incentives of about Rs 5,000 to Rs 20,000 to employees of over 800-1,000 companies associated with the carmaker to help liquidate stock which will potentially lead to its highest ever retail sales in history, said several people familiar with the company’s plan.

The move encourages the purchase team — whose job is to source parts at the right price — to morph into a sales team, and dealers — who are focused on selling outside — to look for customers internally as well.

Similarly, its other stakeholders will also go beyond their core business to help Maruti Suzuki sell its stock. Till the end of November, Maruti Suzuki was sitting on a stock of over 1.5 to 2 lakh units, but the management wanted to ensure that the company begins 2019 with minimal stock, and the sales and marketing teams were allowed to push their products by offering discounts and incentives.

A senior executive at a vendor company said there are constant follow-ups from the junior level staff to the GM on how the company has progressed in selling cars. “The conversation is quite unusual, given that the discussion is usually around cost and engineering, but now we are discussing sales target. We understand the situation in the market is bad and are trying our best to generate some numbers, which will eventually help us all,” said the executive.

Maruti Suzuki has been pushing some vendors to generate sales of at least 50-100 units from within their organisations. Several mailers have been sent to all employees and some sales promotion activities too have been organised in the form of banners, posters and canopies.

“But honestly, incentives are not that significant to compel someone to buy a car,” said another person associated with a different stakeholder.

Gaurav Vangaal, senior analyst for forecasting at IHS Markit, said while the move may not generate big volumes in a short time, it will clearly send a message to stakeholders that be it good times or bad, they can only grow with the support of each other.

“The company was gunning for double-digit growth, which seems impossible now, and the entire ecosystem needs to align with the new plan. In an uncertain demand environment, being transparent and nimble is the key — such initiatives will only help each other,” said Vangaal.

The carmaker had taken a similar initiative 4-5 years back. For Maruti, which has stayed ahead of competition in the past 4-5 years, the last six months had been tough, with its volume growth slipping to either flat or negative territory between July and November.

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