Automaker Maruti Suzuki India unveiled the new phase of the company titled, ‘Maruti 3.0’, with an aim to increase the capacity by 20 lakhs unit per annum in nine years.
Chairman R.C. Bhargava revealed the new expansion plan for the company, which also includes adding about 28 different models by the end of the fiscal year 2031 (FY31), while addressing the company shareholders on Saturday.
Presenting the annual report for 2022-23 to the shareholders, the Chairman said that the SUV segment will be the focus of this expansion. With the SUV market gaining momentum in India and the smaller cars losing demand, Maruti, known for its small cars, will shift it’s energies and restructure its operations “to conform to the realities” of the changing market, noted Bhargava, as reported by PTI.
The automaker’s chairman said that double-digit growth can’t be expected from the Indian car industry, but a 6 per cent growth rate is expected to be maintained till FY31.
Elaborating on the new phase, Bhargava said, “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.”
Talking about the challenges for the company, Bhargava said, “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.”
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The Chairman further added that the company will possibly look at a structural reorganisation, to help manage the production of 40 lakh units annually and is expected to soon announce the proposal for the same.
Maruti Suzuki has projected export volumes to grow to 7.5 lakh to 8 lakh cars by FY31. It also expects the first plant at Kharkhoda, Haryana to add a capacity of 250,000 and be functional in the first half of 2025. Providing more details on the expansion, Bhargava added, “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.”
He noted that the automaker is considering making changes in the sales structure of the company and will be looking at adding about 28 different models to the market by FY31.
Bhargava assured that although the company is shifting focus to cater to the growing SUV market, hatchbacks, and small cars “will remain a very important part of the company's total portfolio.” The company expects the small car segment to grow by less than 2 per cent annually but it will continue to cater to it’s customers in the category.
Commenting on the outlook for the company, Bhargava said, “Maruti Suzuki expects to grow at a slightly higher rate. Along with the rising domestic demand, the prospects for exports are also expected to continue to improve. Our exports rose to 2,59,000 units last year.”
He also informed the shareholders about the company’s progress in electric vehicles, being made at it’s Gujarat facility. The company expects to have the first model on sale in 2024-25 and add 6 EV models by 2030-31. “These models are expected to comprise 15-20 per cent of our total sales by that time”, Bhargava said.
Bhargava emphasised the company’s push for attaining carbon neutrality, stressing the use of hybrid technology, CNG, compressed biogas, and ethanol “will all lead us faster to our goal of reducing the carbon footprint than relying only on any one technology.”
Although the company suffered production obstacles due to semiconductor shortages, the Chairman expected the impact to lessen in the future and said, “During the current year, there will be further improvements, though normalcy in supplies will still not be achieved.”
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