Maruti Suzuki plans separate servicing network under Nexa chain -:- Equity Research

Pushing for a distinct identity for its Nexa outlets, the country's largest carmaker Maruti Suzuki India  (MSI) plans to have separate servicing network for its products sold under the premium retail chain. The company plans to add two more models to be sold from the Nexa chain -- Baleno RS and Ignis hatchback -- by the end of this year, thus taking the total number to four products. Currently, the chain sells Baleno and S-Cross. MSI is looking at ramping up the production of its premium hatchback Baleno to 12,000 units a month to cut long waiting period on the model. "Currently, we are leveraging on around 3,000 traditional workshops (for Nexa products). But gradually, we plan to have separate Nexa workshops. This year, we plan to run a pilot project and thereafter we are looking at rolling out the initiate," MSI Executive Director Sales and Marketing RS Kalsi told PTI. The existing Nexa dealerships will be given priority to open these workshops, he added. On new models to be introduced through the Nexa channel, Kalsi said: "In the short term, we will have four models as plan to introduce Baleno RS and Ignis by this year end. In the long term, as we have already stated, we plan to launch a total of 15 models by 2020 and it is still quite early to figure out the exact retail strategies for all those models." MSI aims to have 250 Nexa outlets by March 2017 and expects the premium sales and service outlets to contribute 15 per cent of the company's sales by 2020. Launched in July 2015, Nexa today completed one year of operations. It currently has 150 outlets across 94 cities. The company today inaugurated a lounge with display area for its Nexa customers at Terminal 3, Indira Gandhi International Airport. On enhancing Baleno production, Kalsi said: "We started with a production capacity of 8,000 units for Baleno. Now, we are in the process of ramping it up to 10,000 units per month and by October we will further enhance it to 12,000 units." The company has already ramped up the production of compact SUV Vitara Brezza to 10,000 units per month. Currently, Baleno has a waiting period of 6-7 months while Vitara Brezza has a waiting period of around 8-9 months, depending upon variants. Kalsi added that with the start of production at company's Gujarat plant next year, it will get the much needed fillip in cutting waiting periods of various products. "The trial production at the Gujarat plant will begin early next year but it will take some time to ramp up the production there," Kalsi said. The Gujarat plant will have a production capacity of 2.5 lakh units in the first phase which could be ramped up to 15 lakh units going ahead.