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May 2017 Sectoral

Published on: 2017-05-12 11:07:07     810 times read    0  Comments
“We will introduce Suzuki Ignis in the Nepali market soon”

CG MotoCorp is the authorised distributor of the Japanese four-wheeler brand Suzuki and the company has been selling the Alto 800, Alto K10, Wagon R, Celerio, Swift, Dzire, Baleno and Ciaz models of Suzuki cars in Nepal since 1981. Similarly, in the utility segment, the company has been offering the Vitara Breeza and S-Cross. Likewise, the company has rolled out the Omni, Cargo and Eeco models vans and Super Carry in the commercial vehicle segment. Krishana Prasai of New Business Age caught up with Siraj Pant, Deputy General Manager of Sales, Marketing and Strategy of CG MotoCorp to talk about Suzuki’s market expansion in Nepal and new plans. Excerpts:  

How is Suzuki performing in the Nepali market?
We hold more than 50 percent of the domestic automobile market which is as good as in India. Out of ten vehicles sold in India, five are Suzuki. We have a similar market trend here. If you stand on any roadside, you will be amazed to see five out of ten cars are Suzuki. 

We have customers who are brand-conscious and have been diving Suzuki vehicles for many years. The presence of the Japanese vehicle brand in Nepal has spanned a period of 36 years and has earned an excellent brand loyalty. Suzuki throughout the years has remained the first choice among Nepali four-wheeler buyers. 

What is the market share of Suzuki across various four-wheeler segments?
We have mainly three broad categories in passenger four-wheelers namely, cars, vans and utility vehicles. In the passenger vehicle segment, Suzuki has a 40 percent market share. Likewise, in vans we have been enjoying a monopoly covering 90 percent of the market. In the utility vehicles segment, we have a 21 percent share of the market in the UV1 sub-category. This is particularly a very good sign for us as it’s been less than a year since we have started to sell utility vehicles in Nepal.  With the launch of Suzuki Vitara Brezza, we were able to cover 21 percent of the market segment in a single year. 

What is the market reach of Suzuki across Nepal? How is CG MotoCorp providing after sales services? 
We have 32 sales networks across the country and we are planning to add four more this year. With this number we will be in a very good position in the current competitive scenario. We have sales representatives even for a small town like Dadeldhura. We have 22 service centres and 30 spare parts centres in different areas of the country. Likewise, we have resident dealers’ sales executive (RDSE) service also for places where opening showrooms is not feasible and only a minimum number (about five to 10 units) of vehicles are sold. So, we have 26 such exclusive areas in RDSE and 111 spots where we are represented.

Currently, more than 50,000 Suzuki vehicles are running on Nepali roads. The maintenance requirement increases with the vehicle getting older. We have a stock of different categories of spare parts in our mother warehouse. They are well maintained and dealer networks are supplied as per the need. We even have a system in place where we can supply spare and non-moving parts for vehicles that are 100 percent damaged. It takes us 10 to 15 days to fulfill the demand even in a worst case damage scenario.  

What are the emerging trends in the passenger vehicle segment? 
Comparing the trend of the last five years, the compound annual average growth rate of passenger vehicles is 10 percent. Though the passenger cars are ruling the market, slowly the buying trend of customers is changing and shifting towards utility vehicles and the growth of the segment has been gradually increasing.   

How do you assess the effect of NRB’s decision to cap auto loans in Nepali automobile market? 
The Nepali automobile market has crashed big time after seeing an unprecedented growth prior to the central bank’s decision. Over the last seven months of the current fiscal year, the vehicle import amounted to 20,000 units which used to be 15,000-16,000 units annually. The monthly vehicle import in the country used to be 2,000 units before the tightening of the auto loan which is now down to 500-600 units. There has been a significant impact in the vehicle market in this regard.  80 percent of sales used to take place through hire purchase with only a few people as cash-paying customers. An impressive growth was seen after the end of the Terai unrest as banks were aggressive in terms of lending. The interest rate was six percent which is now increased to 13 to 14 percent. It has also negatively impacted the sentiment of Nepalis who have plans to buy vehicles. Now they are waiting for the situation to ease.

What is the pricing range of Suzuki vehicles in Nepal? Any schemes or offer on the purchase of vehicles?
Suzuki is probably the number one company in terms of product range. The product range has been a core competency for us. On this basis, we have existing vehicle models starting from Rs 999,000 to up to Rs 61, 99,000 in Nepal. 

Currently, we are working in two areas of sales. One is the financing solutions for our customers who want to buy Suzuki vehicles. Similarly, we are providing cash discounts of up to Rs 400,000 and free insurance on the purchase of any car to our customers on the occasion of the New Year 2074 which will last for the month of Baisakh. 

What are your sales targets for 2017? What were the sales in 2016?
We sold 5,500 units in 2016. We have a target of 7,000 units for this year which we are confident to meet. 

How do you evaluate the competition in the Nepali automobile market? How has the competition been like for Suzuki?
Though Nepal is a small country for vehicle users, this is one of the competitive markets in the world. Currently, there are nearly 25 brands with more than 100 models competing with each other. And the figures show that even one percent of the population is not motivated to use vehicles. To maintain a market leadership is another challenging part. We try to compete with every small market aspect and consolidate our market share. 

Are you planning to introduce new vehicles in the near future? 
We will be introducing the Suzuki Ignis very soon, which is the most awaited car in the Nepali market.

With the domestic auto market, what are the problems and how can they be addressed?
The major problem for us is the NRB decision to cap the hire purchase loan. Nepal is one of those markets where a cash discount is considered as a major sales promotion scheme, and an excessive cash discount is one of the problems. Similarly, lack of road infrastructure, traffic congestion, unmanaged road expansion are also the main hindrances for the healthy growth of the domestic automobile market.     

What can customers expect from Suzuki?
Suzuki is a prominent vehicle brand with a legacy of 100 years and has its own values and morals. In addition, this brand is also known globally as the market leader in the compact car segment. One of the subsidiaries of Suzuki is in India, which produces 1.5 million cars every year, which means a car, is being manufactured in India every two seconds. The cars manufactured in India are exported to 125 countries across the globe. 

We have more than 50,000 Nepali buyers of Suzuki vehicles who have faith in us. In internal resources we have more than 500 professionals, in different levels, and promise to deliver the best services. 

We have been providing excellent services to our customers. We provide a four-year warranty for our products. We have vehicles with the lowest cost of ownership. With this, Suzuki vehicles offer the best mileage to the owners. Spare parts are also available at reasonable price points. Similarly, we have 14 cars and more than 50 variants, and therefore, customers can have multiple choices while buying vehicles. All of our vehicles are tried, tested and proven.


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