Moneycontrol
Nov 08, 2017 01:20 PM IST | Source: Moneycontrol.com

After achieving 2020 target, Maruti Suzuki may aim for 2.5 million car sales by 2023

The company had not yet formally set a target for a period beyond 2020 but the next aim would likely to be to sell another half a million in three years, said Chairman RC Bhargava

Dhirendra Tripathi @dtrips
 
 
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Maruti Suzuki would look to achieve annual sales of 2.5 million cars by 2023 once it achieves the milestone of 2 million cars per year by 2020, Chairman RC Bhargava told Moneycontrol. He added that the company had not yet formally set a target for a period beyond 2020 but the next aim would likely be to sell another half a million in three years.

“After 2020, after we hit 2 million, the next target would be two and a half million. We haven’t officially fixed the target but assuming that the market remains as strong as we have [now] and there is no disruption of any kind, then we should sell another half a million cars in roughly three years,” Bhargava said. Maruti Suzuki, a 56.21 percent subsidiary of Japan’s Suzuki Motor Corporation, sold 1.56 million vehicles (domestic plus export) in the last financial year.

During the first seven months (April-October) of the FY18, India’s largest passenger carmaker sold 1,033,135 vehicles, 14.7 percent more from the same period a year ago. This compares very favourably against the 8 percent industry growth. Notwithstanding the current momentum in sales, Bhargava said the 2 million per year sales target would be hit only in the targeted year and not any time before that.

What has hurt industry growth in the last two years is the National Green Tribunal’s ban on plying of over 10-year-old diesel vehicles in the national capital. Over 15-year-old petrol vehicles are also not allowed to run in Delhi.

From a high in 2012 when diesel accounted for 47 percent of car sales, the dirty fuel’s share came down to 27 percent in FY17.

The government has set April 2020 as the deadline for Bharat Standard-VI (BS-VI) emission norms to come into place, in line with Prime Minister Narendra Modi’s commitment to environment to prevent climate change. The government pro-actively advanced the timeline of implementation for the much-stricter emission norms by four years to 2020, leapfrogging the BS-V stage which was actually targeted to come into force by 2021.

Bhargava said the ban on sale of over 10-year-old diesel vehicles may lose its relevance once BS-VI is enforced.

“That situation may not remain after the Euro VI (European standard on which BS norms are based) comes into being. I think this ban may not have much justification once Euro VI is implemented because for Euro VI vehicles in terms of emission, whether they are diesel or petrol, there is very little difference,” he said.

It may be mentioned here that BS-VI norms call for higher upgrade from fuel retailers and diesel vehicle manufacturers. Petrol, as a fuel, and petrol vehicles, are already closer to those standards.
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