Interview with Atul Gupta and Anu Anamika

Company Description: Suzuki Motorcycle India Private Limited (SMIPL) is a wholly-owned two-wheeler subsidiary of Suzuki Motor Corporation, Japan. Under the brand name ‘Suzuki’, it sells Hayate, SlingShot Plus, Access, Swish, GS 150R, and other global superbikes like the GSX-R (1000cc), Bandit (1250cc), Hayabusa (1300cc) and Intruder (1800cc). It has installed a manufacturing plant in Gurgaon (Haryana) having an annual capacity of 470,000 units which will be further expanded to 5.4 lakh units. SMIPL has also decided to build a new two wheeler plant at Rohtak , Haryana. It also plans to double its sales and service network in the next two years. Early this year, the company roped in Salman Khan as its first ever brand ambassador in India and are looking at associating with him  across the gamut of his projects, campaigns and initiatives.

It’s a known fact that heading the marketing or any operations of a two-wheeler firm has primarily been a male bastion. How difficult was it to break the glass ceiling and how has the experience been for you?

AA: Honestly speaking, I have never looked at this matter from that point of view. All I can say that I think heading the marketing operations of SMIPL is a very exciting, challenging and fulfilling job. There are ofcourse some challenges when you are selling male-oriented products (bikes). Our target segment is mostly males when it comes to selling the motorcycles. This is because you are not able to experience the product yourself with the same passion. But I don’t believe that should be a deterrent for anyone from my fraternity because there are various female products and brands that men work on. And they do not necessarily experience those products. So it’s all about how you can market the idea. When you talk about glass ceiling, it is more in terms of people around you but not so much in terms of the work itself.

AG: If I can also add to that, I can say it is similar to the people marketing the telecom products in India with no prior experience. There were no experts in the telecom industry when it witnessed a revolution of sorts. And when the people came into telecom, they came from different fields like FMCG, consumer durables, services etc. I think there was a fresh perspective in the way people were selling and marketing telecom products. Likewise, Ms. Anu Anamika brings in an absolute fresh insight into the company which could be looked upon at some point of time.

Mr. Gupta, you have been an old hand with this Japanese firm.  You were earlier working for TVS Suzuki, where you spent around 11 years before moving to Suzuki Motorcycles India. So how would you differentiate the work culture of both the firms?

AG: I would say the whole scenario has changed from the time I was with TVS-Suzuki to now SMIPL. The social dynamics have also changed as time rolled on. The most discernible change was that the overall shift in the culture of the people and that reflected in SMIPL too. Secondly, when I was with TVS, I was the first North Indian working for a South Indian firm. The market was predominantly ruled by that firm for the mopeds they were selling at that point of time. The company’s focus was mainly centered on the Southern part of the country. For me, it was more of a challenge to make sure that the company gets a foothold in the North where I was mostly posted.  Coming back to SMIPL where I am working at present, it’s more of a Japanese culture mixed with an India one because of the Maruti Suzuki rub-off.  People understand the products better.

Out of the total amount invested by SMIPL, how much did you set aside for the marketing and sales promotion strategies? And how much have you earmarked for next year?

AA: That’s a question we normally don’t answer.  But if you could notice that we have consistently increased our marketing and sales promotional activities on a year-on-year basis. Going by the current trends and our future product plans, our marketing spends are well on track

AG: It’s a very dynamic situation for a company like us. Generally when we execute a feasibility study, we earmark a particular percentage of the outlay towards sales promotion strategies. It doesn’t mean that we implement whatever we plan out earlier. The lower the turnover is, the higher is the percentage and vice versa. So the range will be around 5pc when the turnover is high, 10 pc when the turnover is low. So you can say that it can range between 5-10pc of the turnover.

What prompted you to rope in Salman Khan as the brand ambassador for mass segment bikes like the Hayate when his personality is more attuned with superbikes because of the hunk factor?

AA: I do agree to the fact that he has a macho appeal, but his image is cutting across various segments. In fact, he has a huge mass appeal. What we and the people have always known is that he is the star who has the appeal down to the lower segment (100-110cc) than any other star. But actually, surveys have shown that he cuts across target segments. So it’s not just superbikes, but also for a man on the road. And we believe he is the right personality to rope in for a product like Hayate and a brand like Suzuki. We announced the association more with Hayate because it was an all-new mass-segment product that we introduced at that time. Moreover, he is the brand endorser for the company per se and not specifically for a single product like the Hayate.  There are value systems that Salman and Suzuki both have. And that’s where the synergies are.

What has been the response to the Suzuki Hayate? Did you get more numbers from tier-II and Tier-III cities than tier-I cities?

AG: The response for the Hayate has been very good. Figuratively speaking, the numbers that we had planned in production have exceeded our expectations. We are now revising the output of the model to meet the 20-25pc additional demand. The distribution also plays a vital role and we are working on that front too. Right now, we are producing around 10,000 units per month. And yes, we are also getting sizeable numbers from tier-II and tier-III cities. We have a network of about 300 touchpoints right now and intend to take it to 600 in about 18 months from now.  The expansion will be more in the northern and central part of the country.

You have come out with a number of promotional campaigns centred on Hayate like the ‘Hai Hayate, Hai Happiness’ and ‘Ek Tha Tiger, Ek Hai Hayate. What has been the response to these programmes? And how has it benefitted the company?

AA: When we launched the Hayate, we also rolled out its key positioning which is what the product is all about.  This revolved around the tagline, “Suzuki Hayate, yun hi nahi chalate!” And then of course we have taken on the communication more in terms of whatever has been happening in the market and also in Salman’s sphere of things. So obviously our intent was to get the association as close as we could. Incidentally, when Salman became our brand endorser his mega film “Ek Tha Tiger’ was also releasing (15th August, 2012). So it made sense for us tie up on that occasion so we placed one of our superbikes in that film.  Then we provided a once-in-a-lifetime opportunity to five winners of the contest ‘Ek Tha Tiger, Ek Hai Hayate’ to meet Salman Khan. The superstar presented the key of the grand prize – the Suzuki Hayate – to the lucky winner. All five winners were very delighted and happy as they interacted with Salman Khan and posed for photographs with him at the Yash Raj Studios in Mumbai. Just after the campaign ended , the festive season began. The idea is to bring some celebration in people’s lives. The ‘Hai Hayate, Hai Happiness’ campaign offered a range of gifts including Salman Khan-autographed key chains, eyewear and helmets inspired by the superstar’s look in the Hayate television commercial. Some lucky winners were also offered to win an upgrade to a Salman Khan-autographed Hayate. Each customer receives a special Salman Khan tattoo on purchase of the motorcycle which reveals the prize. The campaign added to the festive spirit across the country right through the period of Ganesh Chaturthi, Navratri, Dusshera and Diwali. We at Suzuki felt that these special gifts make the festival celebrations more memorable for our customers and bring good fortune to all during the auspicious period.  So more than pushing sales, it was a celebration of sorts. So far all the campaigns on Hayate have worked very well for us. People have responded very well to the product because the product itself is very good. It has a good styling with excellent mileage.Going further, you will see many more such campaigns which may link up with Salman’s future projects or something new that we are doing.

So will there be more mass segment bikes that you will be coming up with? If yes, will it be positioned below the Hayate? Besides that, how many more products are you planning to add in your portfolio?

AG: The mass segment bike will keep evolving. If you can recollect, a couple of years back, the mass segment bike was more of a Rs. 30,000 kind of a product. Today, it is worth Rs. 40,000. Going forward, it might be equivalent to a Rs. 45,000-50,000 with more features, mileage, etc. Furthermore, people’s aspirations in non-metro cities are also going up. So as the market dynamics change, our endeavour will be to segment our presence in the entry-level segment. It could be an all-new bike or an upgrade of an existing one. Coming to the second part of your question, we intend to roll out 2 new models per year.

Are your customers tech-savvy enough to understand digital marketing? If yes, could you share your viewpoints with us?

AA: Yes, two-wheeler customers are also very tech-savvy. But specific target segments or places in India are not that net savvy. A Hayate customer who is from a semi-urban or rural place is obviously not that net-savvy and may not even have access to the internet. But, there are other segments where customers are very IT-Savvy and would do a recce online before making a final purchase. So we cannot rule out digital medium for promoting our products. We may not be promoting it for a particular target segments but for others like high-end bikes, gearless scooters etc, non-traditional mediums can be leveraged on. And we are using various methods to promote our products on the digital medium, including the social media like Facebook, Twitter, LinkedIn etc. 

If we talk about the two-wheeler market, it has hit a soft landing of sorts due to high fuel prices, etc.  So are you redrawing your strategies when it comes to marketing and selling your products?

AA: The sales slowdown is ofcourse a deterrent fact for the entire automobile industry per se. But that’s where a well-engineered product comes into play. If it’s an excellent product in terms of mileage, maintenance costs, etc, it’s marketable. We are not bogged down by market blues because we have some great products in the market. Obviously the fuel price hike will affect the buyers. But if he wants to buy it, he will do so. So our marketing plans remain on track.

If I am not mistaken, you are running a handful of Big Bike Showrooms in metro cities like Delhi and Mumbai. Do you have any plans to retail them to other cities too? If yes, can you name them? And what are their waiting periods?

AG: We are actually present in 16 cities with workshops and spare parts availability. The waiting period of these bikes depends on model-to-model. In these places, people can afford superbikes and run it on the roads which are better than small towns.

AA: I would like to add that as of now, we have no plans to expand the count as the bulk of our sales are derived from these metro cities.

Are you interested in foraying into the used bike business? If yes, can you share your gameplan with us?

AG: Used Bikes, Financial Services and Insurance Services are something which goes into backward integration. Ideally, one should have all this under one roof. I think we have still not attained those numbers to justify those services. But at some point of time, we should look into it.

Early this year, SMIPL laid the foundation stone for its second manufacturing facility in the country at Rohtak, Haryana. How much have you invested in it? And will you be rolling out all-new models or the existing ones?

AG: I will be able to tell you whatever I know about it. We have earmarked around Rs. 500 crore for this greenfield project in a span of about two to two-and- a-half years. And we are planning to roll out both existing and all-new models. It will be operational by 2014.

And will there be an R&D centre there too? Have you set any timeline for that?

AG: We may do it in 10th, 11th or 12th year of our operations. So as of now we are in our 5th year and have no plans in the foreseeable future. Right now all the products that are made in India are developed at our global facility in Japan.

Taking about your export strategy, do you have plans to ship out the Hayate to other countries?

As of now, there is a paucity of demand in the domestic market. Once we are able to meet our domestic market’s requirements, we may think about it.

If I am not mistaken, 75pc of your total sales come from the scooter segment. So are you eyeing to increase your motorcycle sales by about 50 pc of its overall volumes over the next three years?

AA: Yes, you are right.

AG: As far as putting a timeline is concerned, we are producing 5 lakh+ units from our existing plant at Gurgaon. We need to take it to 10 lakh in two years from both the plants. By that time the production split will be 50pc scooters and 50pc motorcycles.

In order to tap growth potential in the hinterland, Suzuki is believed to be doubling its distribution network to 600 touch points over the next two years. So will that primarily be in non-metro towns?

AG: I will put it the other way. We have 250 dealers and 50 branches. That will be ramped up to 500 dealers and 100 branches. As a result, we will have 600 touchpoints. And the Hayate will be our volume puller in all the outlets.

Mr. Gupta, you have earlier said that to meet growing requirement the company is increasing capacity from 3.6 lakh units to 540,000 units by 2014. So how much of the total outlay has been already pumped in?

AG: I think we have spent around Rs.150 crore and most of the amount has been utilised. We have already reached 4.75 lakh units per annum as far as the capacity is concerned. It will be ramped up to 5.4 lakh units in two shifts.

Is Suzuki Motor Corporation looking at the possibility of making India an export hub and already started shipping out its products from India to Nepal and Columbia?

AA: I would again correct this as this has been misreported at various places. What I told the press was that there could be future possibilities of making India an export hub for global markets. We have identified some neighbouring markets for exports.

AG: We have just started testing waters with Nepal, Colombia and Bangladesh will follow later.

What is your vision for the company? Where do you want to see the company in the next few years?

AG: What we have seen in the last 4 years is what we see in the next few years too.  Our aspirations are that if the market behaves a little more positively, it will help us to move forward in a better way. For that we need to have capacity, products, promotion, and distribution. We are working on all the four parameters. These will all help in reaching the 1 million mark by 2015. We intend to figure among the top 5 two-wheeler players in India.

AA: I will put it very simply. Obviously, marketing has a key role to play in wherever the company aspires to be. The way I look at it is the vision of Suzuki, from being a player which was a last entrant with no prominence to become a player in future which is a force to reckon with and could not be ignored. We want to have a standing in the scheme of things and a brand you cannot ignore. If we can replicate the four-wheeler story, we will be very happy.