Maruti’s AdEx will be around Rs 1,000 crore in FY24: Shashank Srivastava

Buoyed by a spike in sales in the current fiscal, India’s largest car maker Maruti Suzuki, would hike its marketing spend by about 25 percent next financial year, which is likely to take its AdEx from nearly Rs 800 Cr in the current fiscal to nearly Rs 1,000 Cr in FY24. 

"In FY24, our AdEx will be slightly less than Rs 1,000 Cr. One third of this (roughly Rs 300 Cr) would be allocated to digital advertising alone", Shashank Srivastava Brand’s Senior Executive Director (Marketing & Sales), tells exchange4media. 

The company’s AdEx was around Rs 670 Cr in FY20 and Rs 560 Cr FY21. This means, the carmaker would almost double its AdEx within two years.

Srivastava says, “Digital AdEx of the company was barely 2 percent of the total marketing budget a decade ago which went up to around 15 percent five years ago and now it will be 30 percent.” 

Over 25 percent of Martui’s sales inquiries come through digital media. Hence, the company has digitized 24 out of 26 touch points (car buying steps) including finance, says Srivastava, adding that only two touch points-test drive and delivery-are left that can’t be digitized.

“Currently, we are building our own customer data platform. This will provide us with a lot of contextual data for better targeting of potential customers. That's why we want to spend 30 percent of our marketing budget on digital,” Srivastava says. 

GenZ is the new TG

Under Srivastava’s leadership, Maruti’s marketing strategy has taken an interesting turn. You can find the company sponsoring events like Comic Con and Vh1 Supersonics, which are largely focussed around teenagers, where the Maruti Arena stall showcases NEXA car in metaverse. 

This is for the first time that the carmaker has associated itself with the GenZ audience. 

The teenagers don’t usually buy a car. Then what is the rationale behind tapping the GenZ audience? “GenZ is not the actual buyer but they are the biggest influencer when it comes to buying a car,” quips Srivastava, disclosing his catch 'em young policy. 

Srivastava explains, “Car buying criteria are focussed on vehicle’s functionality, design and aspirations. Hence, we also need to change our mindset. Experience of buying a car is very important. Nexa is a very good brand which is associated with music, travel, and passion. The immersive experience of Nexa is driving our sales in a big way. Teenagers influence purchase decisions of the family. Soon, they will be of working age and join the workforce and would buy a car as well. We want them to buy a Maruti then.”

Srivastava smiles, “First time buyers mostly buy Maruti. What young people do, old people would also like to do.” 

This means targeting young consumers helps the company to reach an older population automatically. 

Metaverse proposition

GenZ is the reason why the company has planned to invest more in metaverse. “Metaverse is a very good medium. Currently, we have 450-500 Arena showrooms across India to showcase the vehicles in metaverse. Developing logistic infrastructure and a sales showroom across all cities and towns is not possible. Moreover, everyone can’t travel to showrooms which are faraway. Hence, we would open many more Arena showrooms in the coming fiscal to help consumers to have a feel of the vehicle before buying.”

The company was the early adopter of metaverse. It launched its Grand Vitara, a fuel efficient hybrid SUV in metaverse-named as NEXAverse in July 2022 to mark its entry into the “phygital world”. 

“Over 55,000 people booked the car just on the basis of their immersive experiences in NEXAverse even before the car was physically available. Car production started in August,” Srivastava tells with pride. 

Lauding metaverse, Srivastava noted, “Although Metaverse is yet to be fully defined, it certainly allows crucial interactions in real time, accessible through AR and VR, just like physical interactions.”

Electric Vehicle

Martui has always been strong in the small car segment with ⅔ share in the total portfolio. This segment grew 26 percent in FY22 and now headed towards 40 percent growth in FY23 considering the first two months' sales.  

While several car manufactures have launched their EV versions, Marui seems to be lagging behind. Though Srivastava insists that the large-scale adoption of EV vehicles is far away due to two prime reasons: High cost of acquisition and under-developed charging infrastructure. 

Those who are making EVs are still selling a large number of petrol-diesel cars. We are also in the process of EV development. We can launch our EV model by 2025. The plan is to launch six EVs in different segments by 2030, he says.