Indian representation set to grow in Maruti Suzuki management post acquisition of Suzuki Motor Gujarat

The number of Indians in the country's largest car maker, Maruti Suzuki, will see a steady but incremental increase in the coming years following its proposed acquisition of parent's subsidiary Suzuki Motor Gujarat, top executives of the company said.

The move will also groom and prepare Indian talent to manage the transition towards Zero emission vehicle in the future. 

On Tuesday, Maruti Suzuki's board approved the issuance of equity shares to the Suzuki Motor Corporation (SMC). After the acquisition, Suzuki Motor Gujarat Private Limited (SMG) will become a wholly owned subsidiary of Maruti Suzuki. Suzuki Motor's stake is likely to increase to 58.28 percent from 56.48 percent currently.

According to RC Bhargava, Maruti Suzuki India Chairman, some of the management staff of Suzuki who are there in Gujarat today will get replaced by Indian management staff in due course of time. He also mentioned that just over 4 percent of the shares will be diluted based on the June 30 valuation.

“This will allow the company to make decisions quicker and in a unified manner, as we want to work as a single entity. As far as marketing, sales, and supply chains are concerned, their operations will remain the same. The only difference will be in the operations of production planning and schedules, where we will replace managers posted from Japan with our own managers,” Bhargava told Autocar Professional on the sidelines of a press conference on Tuesday. Notably, On July 31, the Maruti Suzuki board approved the termination of the contract manufacturing agreement with SMG and the acquisition of shares of SMG from SMC.

On a similar note, Hisashi Takeuchi, Managing Director and CEO of the company, mentioned that the process will take time but will lead to a significant evolution in the operation of the company. “At SMG, some of the management positions are held by experts from Japan currently, but gradually that will be replaced by the MSIL management,” he added. 

Bhargava further highlighted that the manufacturing of the company's upcoming electric vehicle models will be carried out at the Gujarat plant, where Indian engineers and managers will take over this charge. Earlier this year, the automaker confirmed that it will launch as many as six electric vehicles (EVs) in the country by the financial year 2030-31. At present, the company offers its cars with petrol and CNG-compatible engines.

“EVs will become a major part of the company’s entire system. Suzuki is investing quite a large amount of money in battery manufacturing in Gujarat, and so we will be manufacturing EVs in the vicinity of that plant. As we go along, our engineers and managers will take over the production of EVs and future models to get a better understanding of EV technology,” Bhargava added. 

Since 2014, SMC has invested a total of Rs 18,000 crore in SMG. The current book value of SMG stands at Rs 12,500 crore, and the rest has depreciated over a  period of time, MSIL management said.