Nexa turns 10: How Maruti Suzuki built a premium segment to retain customers

R.C. Bhargava, the chairman who has seen Maruti through liberalisation, localisation, and competition, has often said that the company’s job is to read the market before it shifts. A decade ago, the writing was on the wall: customers were willing to spend more, and their expectations were changing. Incomes were rising, finance was easier, and first-time buyers were no longer content with bare-bones mobility. Yet, the move was not without risk. Maruti’s great strength was its ubiquity — “India comes home to Maruti” was more than an ad line. By creating a separate premium channel, there was always the danger of confusing that core identity. Also Read : Maruti Suzuki sees compact car uptick in July amid structural stress in entry segment From ₹4 lakh to ₹16 lakh — riding India’s affluence waveIn the last decade, the average price of a new car in India has risen sharply. It is not just inflation — it is a shift in what customers want: larger vehicles, better features, and higher perceived value. The once-dominant sub- ₹5 lakh hatchback segment has steadily shrunk, replaced by compact SUVs and feature-packed sedans. Maruti has moved in step with this trend. Partho Banerjee, Senior Executive Officer- Marketing and Sales, Maruti Suzuki, put it plainly in a recent roundtable, “When we started, the average price point was around ₹4 lakh. We moved to ₹8 lakh, and now it’s ₹15–16 lakh. As our customers move up, we move up.” The Maruti Suzuki Grand Vitara is claimed to have the most affluent customer base in the mid size SUV segment This is the space Nexa was designed to capture. The Grand Vitara, for instance, is attracting some of the most affluent customers Maruti has ever served — buyers who, as Banerjee says, “do not have the ‘look at me’ character” but value understated sophistication. The company has always believed that a customer who starts with an Alto or similar entry model will, over time, want to upgrade — and if Maruti cannot offer that next car, they will find it elsewhere. Nexa is Maruti’s way of keeping those customers within its fold. The Nexa philosophy — premium, but on Maruti’s termsFrom day one, Nexa’s positioning was clear: exclusive, premium, sophisticated — but not luxury. Maruti Suzuki has been careful not to drift into a niche where volumes would be sacrificed for image. The company believes that its job is not to make products for a few thousand customers. The challenge is to give a premium without losing scale. The Baleno, launched through Nexa, was pitched not as just another hatchback, but as a “premium hatchback,” creating a new mental category. The Ciaz offered near-D-segment space at a C-segment price. The Grand Vitara and Invicto now push the brand into ₹20 lakh territory, but with localisation and shared development keeping costs competitive. Banerjee’s view is straightforward: “It’s not the product’s fault when it doesn’t sell, it’s about positioning.” Also Read : Farewell Ciaz? Maruti Suzuki hints at a possible revival in a new form Arena vs Nexa — coexisting without cannibalisationManaging two distinct retail networks is no small feat. Arena, with its vibrant colours and approachable atmosphere, caters to first-time and budget-conscious buyers. Nexa, with its subdued tones and concierge-style service, appeals to those upgrading. The results suggest that the strategy works. When Baleno launched, many expected it to eat into Swift sales. It didn’t. The same fears were voiced when the Fronx arrived — would it hurt Brezza? It didn’t. Maruti Suzuki says that while Arena cars such as the Brezza offer a playful vibe, models like the Fronx that is retailed through the Nexa channel, offer a more sophisticated image Bhargava has often emphasised that segmentation is not just about price points, but about understanding the buyer’s mindset. Still, as the top-end Arena models creep into entry-level Nexa territory in pricing, keeping the two channels distinct will require constant vigilance. Innovation with intent, safety with urgencyMaruti has long been accused of lagging in safety. Bhargava himself has been forthright in saying that regulations must reflect what the mass buyer can afford. But even he acknowledges that the market has shifted. “If customers are willing to pay for more safety, we will provide it,” he told this writer in 2019. Maruti Suzuki has decisively raised the bar on vehicle safety, marking a significant milestone with the launch of the NEXA Safety Shield and Arena Safety Shield, unveiled to coincide with the 10th anniversary of its premium retail network. Banerjee describes safety not merely as a principle but rather a strategic pillar of the more significant overall company framework, which, in FY 2024-25, started its initiatives sooner than legally mandated. A significant milestone is the standardisation of Electronic Stability Program (ESP) across models, and the rollout of six airbags as standard fitment for 14 variants. This supports Maruti Suzuki’s aim of safely making advanced safety technologies accessible to people in the whole vehicle passenger space, right from lower-end hatchbacks and up through higher-end SUVs. This effort is supported by heavy investment in R&D, including the ₹3,800 crore state-of-the-art facility in Rohtak, where more than 50 crash tests per model authenticate the company’s stringent safety procedures. The all-new Dzire’s status as India’s first sedan to receive a 5-star BNCAP rating, along with the Baleno’s 4-star rating are a part of this drive. Apart from car design, the company’s holistic strategy covers road safety learning and emergency treatment, demonstrating a wide-ranging perspective combining technology, customer confidence, and social stewardship in a changing automotive environment. The road aheadIn many ways, Nexa reflects the company’s core philosophy: adapt without losing your base. The carmaker has argued that it must be present in every relevant segment of the market, but never at the cost of becoming a boutique player. For Maruti Suzuki, Nexa is not about chasing German luxury brands. It is about making sure that a customer who enters the Maruti family at the entry level can stay within the brand at the premium scale as well. A decade in, Nexa accounts for nearly one-third of Maruti’s sales. It has reshaped perceptions of the brand, brought in more affluent buyers, and given Maruti a credible presence in segments once left to rivals. The bigger achievement, however, may be that Maruti has managed to go premium without alienating its mass base. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 11 Aug 2025, 09:00 am IST
Source: hindustantimes.com