A recent report in the automotive industry claims that Maruti Suzuki NEXA showrooms planned for the next phase will be smaller in size and focus will stay on just two car display area with the same facility as the normal Tier-1 city dealerships. The move will help in keeping the dealer cost low and not just that, Maruti will lease the showrooms after making them sale-ready to the prospective partners.
This will also help them utilize the huge INR 30,000 crore cash reserve in the real estate sector. The step was considered after getting a large number of requests from the customers regarding the NEXA dealership set up in their area and most of them were from Tier-2 and Tier-3 cities.
Maruti NEXA is a premium car buying destination from the largest selling brand and most dealerships are located in metro and Tier-1 cities. As per the present situation, the prospective buyers from rural areas and small cities, who are interested in the new Ciaz, Baleno, S-Cross, and Ignis have to visit their nearest Tier-1 city for the NEXA experience.
Maruti will also use the concept of mobile dealerships to target more buyers in the coming months. The dealers have already complained about rising costs and shrinking profits, leaving the brand with no other option than compensating through leasing program and restricting the total production to manage inventory in a better way.
Maruti Suzuki recently took a day off from production this week and moreover, the reduction of 10% in total production from April 2019 further confirmed that they are struggling to move cars from the inventory. The monthly offers on Maruti cars bring huge benefits in the form of cash discount, exchange bonus and complimentary insurance.
The brand now retails four cars from the NEXA lineup, accounting to be around 20% of the total sales. They are willing to improve the same through more dealerships while standard Arena dealerships will focus on the increase in a number of products.