There is an interesting post on Team-BHP by GTO posted on 13th June called “Maruti-Suzuki suffering an “Intel Chip-Like” situation? Out of tune with emerging market preferences“. I wanted to write about it as soon as I read it because the comparison between both the management and the target demographic of both companies is very interesting.
First a brief summary of the post. GTO argues that Maruti is in trouble just like Intel because both of the companies have been out of touch with the market requirements and customer aspirations. They say Maruti’s lack of innovation is evident because of stagnant and sloth-like product development and update cycle, excessive reliance on its “Kitna Deti Hai?” brand image and lack of product offerings for aspirational customers. They go on to compare Maruti’s situation with Intel because Intel has missed the mobile market, GPU market and also got beat by Nvidia in “AI Chips” by which they mean again server grade Nvidia A100s I think.
I want to first say that this is not a post in defense of Maruti or Intel, I don’t have a horse in this race; I’m just a guy on the internet with an opinion like millions of others.
I don’t think the comparison is unwarranted. Intel has failed to launch any new exciting product in the last, oh I don’t know, a decade. All the consumer end products from Kaby Lake have been iterative improvements at best and shameful cash grabbing re-brands at worst. Intel’s ambitious plans to Leroy Jenkins the 2020 booming GPU market doesn’t look like it has gone well (although their efforts to fix the bugs and listen to the feedback should be appreciated). From confusing processor nomenclature, recent rebranding to remove the ‘i’ and move to Core Ultra, shameful marketing campaigns like the Snake Oil incident, lack of any market presence of their arm offerings, it is very clear that Intel is doing a lot of things but still their bread and butter are their legacy x86 processors. Onto Maruti.
Oh how the mighty have fallen. Maruti’s best selling cars, the Swift and Alto regularly receive comments on the internet like “tin ka dabba” and their GNCAP results are certainly not helping them. They did not bring any new enthusiast offerings to the Indian market and the one product they did bring, the Jimny, flopped hard. Their recent product strategy seems to be to lease of their designs to Toyota to make badge engineered cars for the people who prefer the Toyota brand image over Maruti. As of now, they have no plans for any EV launch. They have increased the prices gradually to the point that now the top AT variant of Alto costs 6.5 Lakhs on road, why shouldn’t I jump to a Swift or a used Hyundai at that point? The lack of future looking prospects, lack of exciting product launches and being out of touch with the first time car buyer are real issues with Maruti and they don’t look like they want to fix themselves anytime soon.
All of these points about Intel and Maruti are very real. But, Intel is in this position because its Intel and Maruti is in this position because its Maruti. Let me explain. An enthusiast might complain about the iterative and boring improvements of Intel generations, be shocked at the horrible support for DirectX11 predecessors in their GPUs at launch. But if you go to Nehru Place in Delhi or CTC in Hyderabad, you ask the guy for a laptop there is absolutely no chance that he will offer you an AMD system. You have to choose between many models that have Intel processors but if you want AMD, you have to select the processor you want first and find that one obscure laptop that it comes in. If you look at Steam Survey Intel’s market presence is 65%. AMD is the exception in most regions and Intel is the norm. I’m glad the situation is changing and Intel has some competition but it does not look like their position as the market leader will be toppled anytime soon. I’m not going to talk about Macs here because they priced themselves out of the market. Similarly, the chances of a first time car buyer’s extended family having a Maruti and a mid 20s’ hand me down car being a Maruti are very high. Everyone’s favorite used car is an Alto, not Kwid, not i20, not the Altroz but an Alto. I do agree that Maruti’s future ambitions are confusing. Their EV prospects are non existent but an EV is not the practical choice for a first time buyer and that first time buyer is the biggest target of Maruti and for many years has been the only target of Maruti. The clock is ticking, and they needed a platform ready yesterday because Tata has beat them to a Punch (hehe). Intel’s future does look promising, their Arm variants are little bit better than what they were at launch and I hope they don’t fumble the Foundry project. I want to emphasize that both these companies have a complicated corporate management situation but their engineers are extremely talented and their present situation is not a cause of concern but a consequence of our economic structure and their past of being early market leaders in the beginning and conglomerates too big to experiment now. The market deserves better. The customer deserves better safety, better experience and better value than whatever these two companies offer. And I didn’t even go into detail about the scummy practices they’ve been involved in.
Enthusiasts and people with aspirations are often disappointed with the world around them because they are asked to settle down and be content with what they have. “No, you can’t have the Swift Sport or the Intel Arc in India” is what they hear. But they also need to know that they represent 1% of the customers and they are at less than the top 1% of the earners in our country. Their brand loyalty and nostalgia means nothing to the shareholder who will sell tomorrow or the middle manager who will jump to a different company 3 years from now. The world would be beautiful if we could have whatever we wanted, no?
But don’t forget. Its called Lord Alto. Maybe the Lord in its name is not about its miraculous presence in the most random Himalayan roads or its reliability despite being a tin ka dabba but maybe that its about a stubborn aristocrat who refused to listen to the people, whose presence slowly becomes irrelevant and will fade away from prominence when people eventually move on to a new leader.
