Maruti Suzuki expects new SUVs to drive sales, margins

“There was a delay in launching new models last year because of covid-19, but we have a number of new models coming this year, which will help us restore our market share. With volumes going up, margins should improve as we go along,” R.C. Bhargava, chairman of Maruti Suzuki, said at the company’s 41st annual general meeting held on Wednesday.

Maruti Suzuki’s market share fell to nearly 43% at the end of FY22, from 47% in FY21.

The company is set to shortly start selling the Grand Vitara, which has been developed as part of an alliance between Suzuki Motor Corp. and Toyota Motor Corp.

The automaker aims to produce two million cars this year with the shortage in semiconductors starting to ease, Bhargava said.

Maruti Suzuki also aims to scale up development of vehicles based on alternate fuel, including ethanol and biogas, even as full electric vehicles (EVs) remain some time away and are initially expected to be niche products catering to the “upper segment” of its customer base.

“One of the areas (Prime Minister Narendra Modi) suggested was compressed bio-methane gas. We are immediately looking into this area because there is enormous potential for the country and for providing a source of energy that is renewable and extremely clean. I think the Prime Minister’s vision in this area is one of the very significant changes that will happen in the Indian economy,” he said.

Bhargava outlined Maruti Suzuki’s EV plans and said that the first range of EVs that will be introduced in the financial year 2024-25 will be for the “upper-end” of the market, a niche product that will help it gauge market acceptance for the new technology. Suzuki’s battery manufacturing plant in Gujarat will be significant to Maruti’s EV programme, he pointed out. The plant will also undertake cell manufacturing, he added.

Bhargava, who addressed shareholders in the presence of Suzuki Motor chairman Osamu Suzuki, also sought the Japanese parent’s support for any organizational relook that Maruti Suzuki may have to make in India as it becomes an increasingly significant market for Suzuki.

“With the growing volumes of production in India and the growing importance of India and the availability of capable manpower in India, do we not need now to look at how we are organized in India? Beginning with 2 million vehicles and in a few years, possibly 3 million vehicles, what is the most efficient way of functioning in future, across all areas, whether it is production or sales and marketing or research and development, we will all apply ourselves to thinking for the future and ensure that your company grows in the most efficient manner in the coming years and I hope that when we come up with changes, those are found useful to do in the future, we will have your backing and support,” Bhargava said.

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