Maruti Udyog media account may be up for grabs

MUMBAI: The Rs 60-70-crore media account of Maruti Udyog is up for review, say reliable media sources.

Maruti’s entire media planning and buying mandate currently lies with Initiative (from Lintas Media group). Sources close to this development say that Maruti officials are contemplating a shift to WPP’s Rs 3000 crore GroupM who’ve reportedly been asked to pitch for the business. Sundar Raman, managing director of MindShare for North and East, has been briefed on the business, say the sources. When contacted by DNA Money, Maruti Udyog’s corporate communications official denied the development and stated that they were happy with their current agency Initiative.

A formal pitch is likely to take place in the coming days. The industry sources say that GroupM could be looking at handling this business under its youngest agency brand mediaedge:cia. Andre Nair, chairman and CEO of mediaedge:cia (MEC), was reportedly in town to have parleys with Maruti officials.

GroupM in India holds 40-50% of the media-buying market and if this account actually drives its way, this share would obviously get further bolstered. It is not clear whether Maruti is in dialogue with other media agencies as well (for instance earlier incumbent on the media business—Madison?)

Any possible reason why automobile giant Maruti could be putting this business up for review? Well the buzz is that they were less than happy about Initiative head Kartik Iyer’s sudden resignation some months ago, and the subsequent exit of key hand Mausumi Kar who headed Maruti business. Though Premjeet Sodhi has recently stepped in as Initiative head, Maruti felt that it was time to examine its options, add the sources.

Also, a lot is happening in their product line-up. Maruti has been in the news for the launch of the new Zen, the overhauling of existing models, and its proposed entry into new segments: its Grand Vitara and top-end new Baleno are expected mid this year and its next-gen Alto and Esteem are also on the anvil. For the six months (ending September 2006), Maruti’s net sales stood at Rs.6544.7 crore and profit registered was Rs.737 crore. For a corresponding period in the previous year, net sales recorded were equal to Rs 5667.06 and profit was Rs.489 crore.

In the past, Maruti’s media planning and buying was split between Madison and Initiative. Initiative was handling the buying business for print, while Madison was looking after the buying for television. After that, Maruti consolidated its entire media portfolio under Lintas Media Group. Maruti will continue to have a slew of creative agencies - Hakuhodo Percept handles the flagship brands Maruti 800 and Zen; Lowe handles Alto, Baleno, Esteem, Omni and Versa; Capital Advertising handles the True Value (automobile finance) account as well as the corporate advertising and N2N (fleet management service) businesses of Maruti; and Contract is in charge of Grand Vitara besides WagonR.