Betting Big On SUVs, EVs
The June launch of the Jimny, the much-awaited SUV from the Maruti Suzuki stable, promises to be a keenly watched affair. Till last week of May, it had got pre-bookings of around 30,000 units. With this, the SUV segment, currently led by Mahindra’s Thar, is set to witness intense competition. There are as many as 46 brands in the SUV space. Maruti’s SUVs include Brezza and Grand Vitara.
There is a historical reason why Maruti Suzuki didn’t venture into SUVs in early years. In a recent interview with BW Businessworld, Maruti Chairman R.C. Bhargava explained the reasons. He said: “We were a little slow in getting into SUVs. One of the reasons was that Suzuki, and therefore, Maruti, was never very strong in diesel engines. Suzuki was actually originally a petrol-only car manufacturer,” he adds.
Now, however, Maruti is eyeing “at least 25 per cent market share of SUVs this year”. The Jimny launch is thus important and much-anticipated for the auto major.
It’s just not the SUVs, Maruti has made its intention to make a big splash in the EV category as well. “We get into the EVs from 2024-25 (with the launch of six EVs in six years – there would be one new model a year, broadly speaking). I'm sure these models will be very well accepted, and will give us a leadership position in the EV segment also,” says Bhargava.
After the Indian auto industry grew in 2022-23 above the 2018-19 levels, and experts now hoping that the record sales in FY23 would mark a new phase of expansion, Bhargava feels that the Indian car industry is slated to grow to become the third-largest in the world, “probably in three years from now”, and that Maruti will have “a very significant role in that”.
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With a market share of 41 per cent Maruti has been the dominant auto player in India, over the years. It has publicly expressed its ambitions to increase its market share to 50 per cent.
With a car penetration rate in India at around 32 per 1,000 (and most other parts of the world having reached saturation points – US at 900 per 1,000, China at over 200 per 1,000), the Indian market, however, holds huge potential for growth in auto.
In his recent interaction with BW Businessworld, Bhargava also spoke about the Maruti story and his own experience in leading the company.
The success of Maruti in India is a tribute to its workforce, says Bhargava. “The success of Maruti in India is also because we could get workers to participate in that. They understood that if they did that the company would grow. (And) they would also grow along with the company”.
Bhargava feels that the auto industry could do with more attention and encouragement from policymakers. “Of these 70 odd years, I don't think that we have yet accepted that the car industry has been a major driver of manufacturing growth in many countries. And that the car industry has several linkages to different types of industries… If you look at the policy statements over the last even 20 years, I'm not sure if you'll find any policy statement which talks of cars being a high-priority industry,” he adds.
A former IAS officer (he topped the Civil Services examination), and an iconic leader, Bhargava says that in his personal life, he benefitted a great deal because he always had an open mind. “I was willing to learn from anybody,” he says. “Amongst the important things that I learned was that even if a person is not highly educated, for instance, the workman who may only be a high school passout, s/he has a lot of capability and the ability to contribute towards achieving excellence,” he concludes.
suman@businessworld.in
