Maruti Suzuki plans to add 28 different models in next seven years
3 min read 06 Aug 2023, 09:44 AM ISTMaruti Suzuki plans to add 28 different car models and increase production capacity by 20 lakh units in the next seven years. The automaker is also considering structural reorganisation
PremiumAutomaker Maruti Suzuki India has planned to add about 28 different models in the next seven years, according to the company's Chairman R C Bhargava.
The company is kicking off the 'Maruti 3.0' strategy to ramp up its production too. Bhargava, during his address to the company's shareholders in the Annual Report for 2022-23 added that the company has aimed to add another 20 lakh units of production capacity in nine years.
"What is now being planned can be said to be the start of 'Maruti 3.0'. Our first phase was when we were a public enterprise. The second phase ended with the Covid pandemic, and the Indian car market became the third largest in the world. The challenges before the company are unprecedented. It took us 40 years to create a capacity of 2 million units and SMC (Suzuki Motor Corporation) helped in this process by establishing the Gujarat facility. Your company now has to add the next 2 million in a period of 9 years," Bhargava told Maruti's shareholders.
Further, the chairman hinted at possible structural reorganisation. He said, "The task of managing all the issues relating to the production of 40 lakh units a year requires considerable thought and possible reorganisation of the structure of the company keeping in view the best interests of all shareholders as well as other stakeholders of the company. We will, as soon as possible, announce what we are proposing".
The MSI chairman shared details about the new production plants of the company. He added, "Work is progressing at the first site in Kharkhoda, Haryana, and it is expected that the first plant of 250,000 capacity will start production in the first half of 2025. Thereafter, one similar plant will be added each year to reach a capacity of one million. At the same time, we are in the process of selecting a second site for adding another one million capacity by FY 2030-31".
The bigger challenge for the Indian automaker is not production but sale of the cars, Bhargava asserted.
"The challenge is not only to produce 40 lakh cars a year and possibly higher volumes in the subsequent years but the company also has to sell this number of cars," he added, "By FY 2030-31, your company could have about 28 different models. Clearly the organisation and systems for selling such a large variety of cars will require changes from what exists at present".
Maruti Suzuki, which is famous for its hatchbacks, is now working on a new strategy as demands shrink.
Bhargava said, "Since there are no prospects of demand for the smaller entry-level car market recovering to the growth rates of the past, we are restructuring our production facilities to conform to the realities and what we are projecting for the future. 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%," he said, adding the company intends to do whatever is necessary to meet customer needs in this segment in the best possible manner.
On electric car manufacturing, Bhargava told shareholders that the development of the EVs is going well at the Gujarat facility and the company expects to start the sale of the first model in 2024-25.
The MSI chairman proclaimed that by 2030-31, the company might introduce six EV models. He also stressed on the usage of hybrid technology, ethanol, compressed biogas, and CNG in cars, saying it "will all lead us faster to our goal of reducing the carbon footprint than relying only on any one technology".
'MARUTI LEADS IN SUVs IN JULY'
Maruti Suzuki became the leading player in the SUV space in July this year with a market share of 24.6%. Recently, the company's Senior Executive Officer (Marketing and Sales) Shashank Srivastava said the volume of the SUV segment grew 46,620 units. last month. He noted that the company's market share in the SUV space has grown from 7.1% in July last year to 24.6% by July end of this year.
'DECLINE IN SALE OF SMALL CARS'
Maruti Suzuki said that the sales of mini segment cars, comprising Alto and S-Presso, declined to 9,590 units last month as against 20,333 units in July 2022.
Sales of compact cars, including Baleno, Celerio, Dzire, Ignis, and Swift, also fell by 21% to 67,102 units as compared to 84,818 units in the year-ago period.
