Archive for April 16th, 2012

Which is the car – Ertiga or LUV?

Suzuki introduces the concept for LUV, or ‘Life Utility Vehicle’ with Ertiga.

The launch ad, a lavish and extravagant double spread in leading newspapers, has a headline which launches the concept of LUV: “Live life with LUV”, it says.

The subhead says: “Presenting ERTIGA. The Life Utility Vehicle.”

Up to this point, one is clear that the car model is called Ertiga, and Life Utility Vehicle is a descriptor.

The confusion begins when one gets to the body copy. “LUV is not just a car. It is a Life Utility Vehicle designed to help you do all the things you love, with a little more love. And it is here in India before anywhere else in the world. So you can experience this feeling called LUV before the rest of the world does.”

The highlights of the car are then listed. “LUV is flexible. 5 +2 flexi-seating. LUV is powerful. 95 PS in petrol & 90 PS in diesel. LUV goes further. 16.02* km/l in petrol and 20.77* km/l in diesel. LUV is accommodating. Roominess in a compact design. LUV is comforting. 2nd row AC.”

The autosuggestion, because LUV as an acronym is so close to the industry standard acronym SUV for Sports Utility Vehicle, is that LUV is a path-breaking new category from Suzuki.

The headline, the subhead and the body copy, however, suggest that LUV is a brand, not a category, not a descriptor.

The SUV, for example, is an acronym that can be used for any sports utility vehicle by any manufacturer, just as any manufacturer can call a sedan a sedan or a saloon a saloon.

Suzuki has trademarked LUV, so it’s an acronym that they have felt the need to own. The way that they have gone about it in the launch campaign makes it more the name of the car, rather than a new category, of which Ertiga is the first.

LUV should have been about a particular new kind of car, rather than about a particular car. The moment Suzuki detailed the specifications, LUV became a defined car model. The highlights of LUV should have been “LUV gives you flexi-seating, LUV is powerful. LUV gives great mileage. LUV is accommodating. LUV cools the entire car.”

The thought was large – that of creating a category which they could ‘own’. Where the campaign gets hazy and goes wrong is in their effort to club two launches into one – the launch of the concept, LUV, and the launch of the first offering in the LUV class, Ertiga.

What Suzuki should have done is to launch LUV, the new category as defined by cars with flexi-seating, great mileage, great power and efficient air-conditioning, and followed that up with the launch of the first car in the LUV class, the Ertiga.

The way both LUV and Ertiga have been launched, there’s confusion. Is one buying the LUV or the Ertiga? Or both?

Thanks to Hindu.


Analysts see Ertiga driving Maruti

The old logo of Maruti Suzuki India Limited. L...

The old logo of Maruti Suzuki India Limited. Later the logo of Suzuki Motor Corp. was also added to it (Photo credit: Wikipedia)


Maruti ERTIGA (Photo credit: Balaji.B)

Ertiga, the newest offering from the Maruti Suzuki stable that aims to create a new segment within the multi-purpose vehicle (MPV) space, has got a huge thumbs-up from analysts.

They feel with Ertiga, the company has a strong product in terms of value of money, design, mileage and pricing, which would give it a strong footing in the 370,000 unit per annum utility vehicle (UV) market, where it did not have a presence. With an attractive introductory price proposition (Rs589,000 -845,000), Ertiga poses a challenge to current leaders Toyota’s Innova (starting price: Rs914,000) and M&M’s Xylo (starting price: Rs734,000).

Toyota and M&M have a combined volume of 9,000 units per month. While Maruti is targeting 4,000-5,000 units per month, analysts see it selling 2,000-3,000 units.

Kaushal Maroo and Keyur Vora, analysts, Religare Capital Markets, said, “The Ertiga will occupy a niche between premium hatchbacks and larger utility vehicles. Given its brand equity and reach, we expect the Ertiga to clock a monthly run-rate of 3,000 units.”

MPVs accounts for 10% of the total passenger vehicle market and in the past three years have outpaced car volume growth. According to industry estimates, about 10 million vehicle owners are looking for an upgrade, which spells a huge opportunity for Ertiga.

Hitesh Goel, analyst, Kotak Institutional Equities Research, said, “It could be attractive for a customer who is buying Xylo, Sumo Grande and Tavera as it is more compact and offers better value than these models (better fuel efficiency and lower price). However, Ertiga is under-powered compared with Xylo and Innova.”

Maruti is looking to differentiate the vehicle on two counts—its sedan-like handling, better driveability and fuel efficiency —16.02 / 20.77kmpl for petrol/diesel variants.

Jatin Chawla and Akshay Saxena, research analysts, Credit Suisse, said, “The Ertiga is around 30% lighter than the Xylo. Hence, despite its significantly smaller 1.3 litre diesel engine than Xylo’s 2.5 litre engine, the differences in power and torque are not as significant. Moreover, the Ertiga is built on a monocoque design (like the XUV), compared to a body on a frame chassis in the Xylo. Hence, the handling is much better, which should appeal to the personal segment.”

However, the competition would follow soon.

While Renault is introducing compact SUV Duster, Ford is bringing in the EcoSport, Nissan is coming with Evalia, M&M mini Xylo and GM is planning a new MPV.

“These products are likely to be priced between Rs 600,000 and Rs 10,00,000,” said Aditya Makharia and Ritesh Gupta, analysts, JPMorgan.

Deepak Jain, equity research, MF Global, said a number of compact MPVs are to be launched this fiscal but the Ertiga’s launch provides Maruti a head-start.

Meanwhile, Maruti will start exporting Ertiga to Indonesia by end of the next month.

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