Difficulty in suddenly being a leader from a perennial follower(From The Economic Times)

Shinzo Nakanishi is in a dilemma his competitors would give an arm and a leg to be in. The 64-year-old managing director of India’s largest carmaker is finding it difficult to come to terms with an enviable position his company has been blessed with: leadership. “We can’t see anyone in front. All are behind. My management and I have no experience [of such a phenomenon].”

There’s a simple reason for that: Suzuki is a minnow in the global auto sweepstakes, including in its home country Japan. Nakanishi, who has been working with Suzuki Corporation since the 1970s, is more accustomed to being at the tail end rather than at the pole position. “We were always No. 7, No. 8. Toyota,Honda, Nissan, everybody was ahead of us,” he recalls. India is different. “Here we are top runner. What should we do? What we should do?” asks Nakanishi.

Suzuki, the global follower is grappling to guide Maruti, the Indian leader, that too at a time when Maruti is under its most severe attack. Its market share has been steadily falling, from a virtual monopoly in the 1980s to 63% in 1999 to well under 50% now.

But falling market share isn’t a new or the immediate problem. That’s because of two reasons: it still controls an impressive 45% of the Indian car market and the company has shown an impressive sales and profits growth in recent years. It’s the dramatically transformed nature of the competition and a fundamental shift in car buyers’ preference that now threatens to deliver a knockout challenge to Maruti.

Frenetic battle preparations are on to maintain Maruti’s grip on Indian roads. But its bigger battle is internal, not external. Used to being led in Japan, leading does not come naturally to both Suzuki and Nakanishi. Faced with strong wave of competitors, the first instinct is to follow. “We follow someone who is No. 1 and learn from them, from Nissan and Toyota,” says Nakanishi.

Yet it is this humility and honesty which reassures that the company with the slogan “India comes home in a Maruti” is serious in taking the battle of its lifetime head on. But first more on the magnitude of it challenge.

The Competition Strikes at the Heart

Maruti’s fiefdom has been the compact A2 segment with models like Alto , WagonR , Ritz and Swift . Though Hyundai, Tata and GM have successful models in this segment, Maruti continued to rule. That’s set to change now. The company’s market share in this segment has slipped from 58% in 2006 to 56% in 2011, as newer, snazzier entrants like Volkswagen’s Polo and Ford’s Figo attract a younger audience that is less fussed about price and more keen on looks, features and brand.


About manishankarscribbles

A management trainer, consultant and faculty with experiences in South Asia, Middle East and Australasia. I am also present in www.manishankarthetrainer.blogspot.com and www.twitter.com/manitwitts apart from https://manishankarscribbles.wordpress.com .
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