Booz and Company partner Vikas Sehgal, who handles the automobiles practice at the consultancy, is generally not happy with Maruti-Suzuki. He feels that the India company pays far too much in technology royalty (5.5 per cent of revenues) to its parent company, Suzuki Motor Company, Japan. The Kizashi has added to his ire: he feels the Japanese parent is not using that money well.
"Suzuki is a small-car company, they do not have the expertise to build larger vehicles nor do they have the distribution and sales structure to support a vehicle like the Kizashi in markets where a car of this size matters, such as the United States," argues Sehgal. He believes that instead of spending a billion-odd dollars "of Maruti's money" on developing the Kizashi, Suzuki should have invested in expanding the production facilities here, and its small-car portfolio.
During a recent tour of Maruti Suzuki's Gurgaon plant, M.M. Singh, Managing Executive Officer for Production, argued that Maruti's production expertise had allowed it to wring much more out of its plants than the rated capacity. In 2010, for example, it produced 1.2 million cars from a rated capacity of just over 900,000. With two more lines at Manesar due to add a capacity of 500,000 cars by 2012, Singh has no doubt Maruti will be able to keep up with demand.
Sehgal is not impressed. "There will be increased fragmentation of the small-car market, which will demand more products, which would mean more complexity on production lines. That in turn leads to reduced efficiency."
As for the Kizashi, Mayank Pareek, Maruti's Managing Executive Officer for Marketing and Sales, feels that the car will not be a complete washout like Grand Vitara, the last car the company sold in the Rs 10-lakh-plus segment. "We have learnt our lessons," he says. But, that only time (and sales data) will tell.
The Suzuki Kizashi drove nicely when we took it for a spin along a 100 km loop on NH76 outside Udaipur. The car's manual transmission model is fun, though the automatic is better for life inside the city. Ride quality is about as good as the Honda Accord, and the 2.4-litre engine is peppy enough and delivered an economical 11.5 km to a litre on the highway.