Maruti Suzuki targeting 2.5m sales by 2022-23

by Sumantra B Barooah 08 Sep 2017

Maruti Suzuki India, the country’s largest carmaker, has just announced an expansion of its sales ambition. While it is well known that the company is targeting 2m sales (both domestic and export) by the year 2020, chairman RC Bhargava has revealed that there is a new target in its crosshairs – 2.5 million units by FY2022-23. And, with the new Gujarat plant going on stream, it will have the manufacturing capacity to handle the surge in demand.

In FY2017, Maruti Suzuki India produced a total of 1,420,081 units (+8.54%) and sold a total of 1,429,201 units comprising 1,305,351 domestic sales (+11.50%) and 123,850 exports (+1.76%).

At present, it has cumulative manufacturing capacity of 1.75 million units, comprising 900,000 units at the Gurgaon plant (three assembly lines), 600,000 units at the Manesar plant (two assembly lines) and 250,000 units at the Gujarat plant (currently one assembly line).

It is understood that Maruti is now actively considering a fourth assembly line for the Gujarat plant, which will have another two assembly lines of 250,000 units each by 2019. Thus, with a total capacity of a million units at the Gujarat plant, Maruti's overall capacity across three plant will stand augmented to 2.5m units. Bhargava said, “We've commissioned the first assembly line (250,000 units)  at the Gujarat plant. Work is underway on the second and third lines.”

Speaking at the 57th ACMA Convention in New Delhi today, Bhargava said that India will surpass Germany in passenger car sales this year and Japan by 2020 to enter the global Top 3 club.

Maruti and the EV connection
Bhargava took up the hot topic of electromobility, saying, “We need to reduce dependency on energy imports, hence this is a timely move on technology but we need conducive policies. While the government has to enable mass scale electric mobility, the auto industry has the responsibility of making electric vehicles acceptable to existing vehicle users in the Indian market. We have to move towards larger use of EVs and as an industry we should encourage them.”

Commenting on battery technology, Bhargava said: “Power from renewable sources has gained traction, and mobility has to recognise this.” It may be recollected that on April 14 this year,  Suzuki Motor Corporation, Toshiba Corporation and Denso Corporation reached a basic agreement on establishing a joint venture company for production of automotive lithium-ion battery packs in India.

According to the three Japanese companies’ announcement, the JV company – with Suzuki 50 percent, Toshiba 40 percent and Denso 10 percent –is to be set up this year with manufacturing operations planned at the earliest. The initial investment will be 20 billion Japanese yen

Suzuki Motor Corporation, which is the main driver for the JV, will be key to drive home the advantage of manufacturing lithium-ion batteries in its key global market – India – where the government is keen there is greater adoption of electric vehicles (EVs).

“Customers should be able to use their car wherever and whenever they want to,” said Bhargava. However, he added, that while electromobility increases in India, export of IC engined-vehicle will continue to certain markets like Africa and oil exporting countries, which might not promote the use of EVs.

Urges further improvement in Indian component quality levels
Speaking on the Indian component industry, Bhargava said that while Indian suppliers have come a long way, there is still a lot of scope for further improvement in quality levels. He cited the example of a medium-sized Indo-Japanese JV, whose products have faced quality issues in Japan. “Reduce overheads and waste, become global, and ensure there is no compromise on quality. This is the mantra for success,” the Maruti chairman said.