The company, which has commenced work to double its production capacity, is in the process of setting up its largest manufacturing facility with total installed capacity of 1 million units at Kharkhoda, Haryana. The board has additionally approved establishment of a factory for another 1 million units, the site for which is yet to be finalised by Maruti Suzuki.
“What is now being planned can be said to be the start of ‘Maruti 3.0 (the first being when it was a public enterprise and the second phase ending with covid)”, Maruti Suzuki Chairman R C Bhargava said in the company annual report for the last financial year (FY23), adding, “The challenge is not only to produce 4 million cars a year, and possibly higher volumes in the subsequent years. We also have to sell this number of cars. By FY 2030-31, your company could have about 28 different models.”
Maruti Suzuki currently has 18 vehicles on sale in the country. The company’s total sales last financial year rose 19% to 1.97 million units. Of this, 259,333 units were exported to 100 countries world over by the company.
Noting that India is now the fastest-growing major economy in the world, Bhargava said “the future outlook is bright”. Maruti Suzuki, along with parent Suzuki Motor Corporation Japan, has been working to strengthen its portfolio of products to meet the changing market situation. The company has in the past one year launched four SUVs – the new Brezza, Grand Vitara, Fronx and Jimny – in the domestic market.
“We now have four very well-accepted SUVs in the market and are on our way to assume leadership in this segment. We will gradually keep increasing our market share that had declined in the last 2-3 years”, Bhargava informed. He, however, said since there are no prospects of demand for the smaller entry level car market recovering to the growth rates of the past, the company is restructuring its production facilities to conform to market realities and future growth prospects in the country. Bhargava clarified despite the slowdown in this category, hatchbacks and small cars will remain a very important part of the total portfolio. “The rate of growth of these cars is expected to be less than 2% a year but the industry volume is almost a million cars a year with MSIL having a share of about 70%. Accordingly, your company intends to do whatever is necessary to meet customer needs in this segment in the best possible manner”, he said.
Overall, Bhargava said while the company does not expect the car industry to grow in double digits, like what happened in China in the past, it expects that the industry will grow at about 6% till FY 2030-31. Maruti Suzuki itself expects to grow at a slightly higher rate on back of demand for its new launches in the SUV segment.
But on the positive side, along with the rising domestic demand, the prospects for exports are also expected to continue to improve. “Our exports rose to 259,000 units last year. We expect the demand for exports to continue to grow and export volumes are projected at 750,000-800,000 cars by FY 2030-31”, Bhargava said.
Separately, Bhargava said the company is on-track to launch its first electric vehicles in the upcoming financial year. He said, “The development of electric vehicles is proceeding well at the Gujarat facility. Your company expects to start the sale of the first model in 2024-25. By 2030-31 we expect to have 6 EV models. These models are expected to comprise 15-20% of our total sales by that time.”
However, he said the conditions in India require that the attainment of carbon neutrality in the transportation sector be achieved by a mix of technologies that are appropriate to the country’s available resources and economic conditions.
“We must use the enormous amount of animal waste that is generated in the country. Equally large is the opportunity created by our agricultural and other waste as well as the potential to increase the output from our land resources. The use of hybrid technology, ethanol, Compressed Bio-gas and CNG in cars will all lead us faster to our goal of reducing the carbon footprint than relying only on any one technology”, he held.
The company’s board recommended that the dividend for FY 2022-23 should be increased to Rs 90 per share, the highest ever on back of record revenues and profit registered last fiscal year.