Maruti Suzuki plans huge investments for India to fuel further growth
Toyota Motor’s President Akio Toyoda and Suzuki Motor’s chairman Osamu Suzuki confirm new technologies and investments in India to Prime Minister Narendra Modi.
Maruti Suzuki India Limited, wholly owned by Suzuki Motor Corporation, Japan, has planned increased investments in India to the tune of INR 10,000 crores. New manufacturing facilities has been set up in Gujarat where production will touch 7.50 lakh units per annum by the end of next year.
Heads of Toyota Motors and Suzuki Motors were in India earlier this year to meet Indian Prime Minister Narendra Modi. Joint plans between the two auto majors, their alliances, and investments in India were discussed.
The two leaders also appraised the PM on possibility of introducing pure hybrid and electric vehicles in India and possibility of producing these vehicles within the country from where they would be making their way to export markets. This comes at a time when India itself is turning towards greener technologies and bringing in new regulations where vehicle emission standards are concerned. Maruti Suzuki’s in-depth knowledge of the Indian market would prove to be advantageous in this venture.
In terms of investments, Suzuki targets INR 10,000 crores in augmenting manufacturing facilities at the company plant in Gujarat from where 750,000 units could be produced each year. Investments into product development, marketing and service infrastructure are also on the cards with an additional INR 4,500 crore investment to launch new products and INR 1,900 crores for commissioning of its R&D center in Rohtak, Haryana. Expansion of sales and service networks are also a part of the company’s investment plans.
Expanding reach is also a part of Maruti Suzuki plans. The company targets sales of 2 million units per annum by the turn of this decade with INR 11,000 crore investment towards existing sales and service infrastructure, while increased land prices would entail added investments. The company also furthers its reach into interiors of the country and wishes to add 3,000 new outlets and 1,800 workshops over next 3-4 years to its already existing 2,000 sales outlets and 3,200 workshops.
R&D budgets have also been enhanced with Maruti Suzuki planning new vehicles and set to upgrade current models in the market. Maruti Suzuki India Limited has announced 15 new products by 2020 which will entail 70% increase in investments at the R&D center in Rohtak which was earlier set at INR 2,000 crores initially but which has been augmented to INR 3,800 crores. The Rohtak center has recruited 1,400 engineers, most of whom have received training at the Suzuki headquarters in Japan.
An aggressive sales offensive has also been planned by the company. While Maruti Suzuki was noted for its smaller cars such as the Alto, Dzire, Wagon R and Swift, its entry into the midsized, sedan, crossover and SUV segment has also borne much fruit. The Brezza and Baleno have seen increased demand along with the Ignis, Ciaz, S-Cross and Celerio. Increased demand has resulted in the company stepping up production thereby bring down waiting periods on all models.
Besides new products, extensive sales and other growth strategies, Maruti Suzuki is also said to be showing more impetus towards new technology solutions which can be seen in their recent launches – AMT and SHVS. With the new battery packaging facility in the offing, new products with hybrid and electric technology can also be expected from the company.
Increased localization of products is also on the cards with Maruti Suzuki scouting for new vendors and intentions of sourcing from multiple basis. This would help in de-risking operations and will also prevent disruptions in supply. As on date the company has 444 Tier I suppliers and 2,050 Tier II suppliers. More emphasis will be paid to quality as against earlier where precedence was give to cost over quality.