New Delhi: Kenichi Ayukawa took control of Maruti SuzukiBSE -0.81 % at a time when it was going through a tough time.
Repeated labour unrests at Manesar manufacturing facility had hit Maruti Suzuki’s market share. A few months before he joined in April 2013, a senior executive died during a labour agitation at the plant, and it had to suspend production for weeks.
Since then, Maruti Suzuki has settled the labour issues. And, with Ayukawa, 62, in control, it has moved from being a small car specialist to one that is a significant force in more premium segments of the Indian market.
Ayukawa has redirected the company’s product strategy, even as it plugged gaps in its portfolio and made successful launches in new segments, such as the Baleno, Vitara Brezza, Ciaz and S-Cross. The company also took an unprecedented step and launched a new retail channel for premium products. Maruti Suzuki held a 39.4% market share in India when Ayukawa was made its chief executive. Nearly five years since, it makes one in every two passenger vehicles sold in the country. For Japanese parent Suzuki, the Indian unit is the highest contributor to profit and sales volume.
One of his biggest successes has been the NEXA showrooms to showcase premium vehicles. When it launched NEXA, many industry observers had questioned the rationale behind Maruti Suzuki selling products through a new and niche distribution channel, rather than the expansive network it already had. But the decision has paid off. The premium models helped Maruti Suzuki retain its old customers who wanted to upgrade to a higher segment, as well as entice new buyers.
Maruti Suzuki’s dogged persistence in providing upgrade options to its broad customer base in the past three-four years has helped it corner more than 50% of sales in the market, says a senior marketing and sales executive at a rival firm. The share of premium models Baleno, Vitara Brezza, Ciaz and S-Cross has gone up to 29% of total sales now, compared with about 3% in 2014-15.
Ayukawa says he is a “marketing person and is always keen to increase share”, but humbly attributes the success of Maruti Suzuki to product planning initiatives undertaken by his predecessors and continuity in management approaches within the company. Communication and cohesion within the team is very important, he stresses.
Ayukawa is a graduate in law from Osaka University. Though his expertise is not in engineering, he takes a deep interest in product planning.
Ayukawa has also played an active role in empowering the local R&D team, says Maruti Suzuki’s senior executive director for engineering, CV Raman.
“As a leader, he has been able to quickly grasp the workings of the Indian market. He pushes us to develop more locally, goes into model development details and supports us with the required resources,” Raman says. “He gave us a free hand during the development of the Vitara Brezza (the first model Maruti Suzuki designed and developed in India) … That was a big thing for me.”
The team has gone on to take the covers off the firm’s latest ambitious attempt, Concept FutureS, a compact car with design dynamics of a SUV, targeted at the mass segment.
While product interventions are an ongoing process, the next big challenge for the company, Ayukawa says, is to control costs while bringing in new technologies.
Maruti Suzuki is set to launch its first electric vehicle in 2020, and consumer acceptance on a mass scale will depend on affordability. “We have to improve on fuel efficiency, reduce emissions. We are investing in hybrids, in electric. What is crucial is to balance cost and technology,” he says.
Colleagues describe him as a people’s person. Ayukawa is seen at the shop floor frequently. He holds monthly meetings with workers across factories. At times when Maruti Suzuki does not keep him busy, Ayukawa enjoys travelling. Kerala, Rajasthan, Ajanta and Ellora and Darjeeling are some of the destinations he visited over the past few years. The diversity of the country, Ayukawa says, fascinates him.