Maruti Alto completes a decade of dominance but Swift seems to have a measure of it
In 2013-14, the most ubiquitous car on Indian roads–Maruti Alto–completed a full decade of dominance in the market. It first reached the pole position in 2004-05 when it ended the more than two decade rule of its predecessor Maruti 800. It is not a mere coincidence that as it celebrates 10 years of leadership in the year that also marks the end of the road for the M800.
In all aspects Alto has been a worthy successor to the M800 and its impact in the market is second to none. There are quite a few firsts associated with the success of the brand. It is the only car that has breached the 200,000 unit and 300,000 unit mark in a financial year. It is also the fastest to the million mark though the Swift also achieved the feat pretty swiftly. In the last few years, Also has also been the largest selling small car in a single market ahead of VW Gol in Brazil.
Alto today enjoys a position of such strength that it is easy to forget it was an utter failure when it first appeared on Indian roads in 2000. Initially powered by a 1 litre engine and priced between the M800 and Maruti Zen, it was not conceived as a replacement of the M800 but as a product that will expand Maruti’s portfolio.
Consumers stayed away from it either because it was too late to get into the market or too early. It depends on which way you look at it. Had it come 4 years earlier, it could have replaced the Zen that was seen as expensive and snobbish.
And as the Alto’s renaissance in 2004 when it established itself as a successor to the M800 with a similar 800cc engine and a cheaper price tag showed, the original Maruti in 2000 still had some juice left. In a highly ruthless market like India where a second coming is a rarity, Maruti Alto is one big exception.
As it went from strength to strength, its main contenders for the crown kept changing. Most of them have fallen by the wayside. In fact between 2004-05 and 2010-11, which was also its best year, the gap between Alto and the second in the rung has only increased.
After overtaking the M800, it never really faced any competition from it. For the first two years, it was the tall boy Hyundai Santro that was its closest rival. But the gap was much too big for a Hyundai to fill and with Santro ageing, it could not sustain the challenge beyond a couple of years.
Till 2010, Alto was given company at the top by Wagon R (for three years) and Hyundai i10 (for a year). For all its virtues Wagon R was never really a threat. Not only was it expensive, it also belonged to the Maruti stable where the marketing department ensured there was no cannibalisation. The Hyundai i10 threatened briefly but it was in reality competing with the Wagon R instead.
But as the M800 shows, Alto’s dominance would also one day, some day, come to an end. Not that it has to. The Volkswagen Gol in Brazil is an example of a brand that has ruled the market for over 4 decades.
Similarly the VW Golf in Germany has been a bestseller for many many years. It is unlikely though that Alto will enjoy that longevity.
The script has changed somewhat in the aftermath of global recession in 2010. Alto seems to be on a slippery ground and faces a formidable rival in Swift. The two cars again have the backing of the same company and do not cater to identical customers either.
But the consumer preference for cars is changing as well. Buying a cheap value for money car does no longer suit everybody’s palette.
For the last three fiscals, Alto’s sales have declined and the launch of its first next generation model in 2012 has made no difference whatsoever. Swift on the other hand has not suffered an annual decline in sales in its life span and is knocking on the doors of becoming only the second car to sell more than 200,000 units a year.
Chances are, that once growth returns in India, the mini car buyer would again flock to the showroom. That could turn the clock back and enable Alto to hit more highs.
For now, with the Swift closing in, and an increasingly number of Indians preferring a hot hatch over a simple bread and butter small car, it is not too difficult to imagine a different name at the top in the next decade.