Maruti aiming higher this financial year

The car market in India is in sticky pitch. Blame it on inflation, high price of fuel and many other reasons, last few months didn’t go well for the car makers in Indian roads. However, one car maker has been doing wonders and that’s Maruti Suzuki.

India’s largest car maker in terms of car sales is on top gear with its recent launch of S Cross, which has been pitted to compete in the compact SUV range. And just a week after, Maruti Suzuki is boasting of its achievements in the most challenging way in business. It has already announced its plans in pipeline and that includes and underlines “high number of new model launches” in this fiscal, including a compact sport utility vehicle.

The company will have a new manufacturing plant in Gujarat where its parent Suzuki Motor Corp will invest, said Centre alone cannot realise the dream of the country becoming a global manufacturing hub and states would have to play an important role.

“2015-16 will see a high number of new model launches. Suzuki Japan and our engineers here have been jointly working on new model development, and the results are before all to see,” Maruti Suzuki India (MSI) Chairman R C Bhargava said in his address to shareholders in the company’s Annual Report for 2014-15.

“Sometime in the future, we will launch a Compact SUV which will raise our presence in the UV segment by a quantum leap,” MSI Managing Director and CEO Kenichi Ayukawa said.

Although the details of the compact SUV hasn’t been shared, the company said: “Soon, we will also introduce the Compact SUV, the concept of which was presented as XA-Alpha. This will help us cater to an emerging class of customers who prefer SUV appeal while staying compact.”

Bhargava said, in 2014-15, after three years of stagnation, the company “grew 11.1 per cent (in sales), even though the rest of the passenger vehicle industry actually declined 1.3 per cent”.

“Our market share, at the end of the financial year was 45 per cent and we have so far further improved this to 46.8 per cent. This has been achieved due to successful new model launches, and the efforts by all our employees in production, sales and service, supply chain, engineering, quality and other functions,” he added.

For 2014-15 fiscal, the company had posted its highest ever annual sales at 12,92,415 units, up 11.9 per cent, from 11,55,041 units in 2013-14. The previous high was in 2010-11, when the company had sold 12,71,005 units.

The company’s domestic sales during the last fiscal stood at 11,70,702 units, up 11.1 per cent, from 10,53,689 units in 2013-14 fiscal.

On Prime Minister’s ‘Make in India’ campaign, Bhargava said: “The task of making India a globally competitive manufacturing hub cannot be completed in a short time or by the central government alone and states also need to play a major role.”

“Many changes and improvements have to be made. The states have to play a major role in many areas, so that manufacturing can become competitive.

All of us, as citizens and voters, entrepreneurs and managers, have to understand what is required to make manufacturing in India globally competitive, and nudge political parties and governments in this direction,” Bhargava said.

Commenting on the progress by MSI to enhance R&D, Bhargava said: “Our Rohtak R&D facility will be completed by the time we meet next year. This will be a major step forward for the company, and will help new model development.”

“On similar lines, we will work on a channel for commercial vehicle sales,” he said, adding by the close of the current financial year, more than 100 NEXA showrooms would be opened in more than 30 Indian cities.

Ayukawa said the company would also focus more on exports than it had done in the past.

“In particular, we have to develop the Africa and Middle-East markets. We will have to plan for launching global products to serve the advanced markets and expanding our network in the emerging markets as long term measures in building export strength,” he said.

Commenting on the company’s manufacturing capacity, Bhargava said the two plants in Gurgaon and Manesar will be fully utilised next year and the company needed new capacity.

The two plants have a combined annual capacity of 15.5 lakh units. The Gujarat plant will have a total capacity of 7.5 lakh units annually when fully completed.

He said the Gujarat plant is expected to start production in 2017. MSI will have a contract manufacturing arrangement with parent Suzuki.