Auto industry to grow at 8% next fiscal, Maruti expects to toe the line: RC Bhargava

Maruti Suzuki Chairman R.C. Bhargava

The country's largest carmaker Maruti Suzuki India on October 28 reported a massive 334 percent year-on-year (YoY) growth in its standalone net profit for the quarter ended September FY23 (Q2FY23) on a low base.

Discussing the results, Maruti's RC Bharghava said in an interview with CNBC-TV18: "Higher commodity prices and chip shortage concerns had impacted earnings in the year-ago period. We expect the problems to continue for another two months and haven't been able to produce as much as the demand was there."

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He added that the back orders have gone up and that there is scope for improvement. Also, the automotive industry is expected to grow at eight percent in the next fiscal and Maruti will attempt to be in line with the growth of the industry, Bhargava said.

There is continued pressure on the entry-level segment, which poses a challenge in terms of meeting the industry growth rate. However, the Maruti Chairman assured that the carmaker has taken these challenges into account while making projections for the next year.

"The entry-level segment in this quarter has shown growth for the first time after many quarters. This is the result of the festival season, and we do not expect similar results as we go ahead this year. Over the last three years this segment has declined close to 30 percent," he said.

Speaking about redefining Maruti's product strategy, Bhargava said that there are new SUVs coming. "Our composition of vehicles is changing. Instead of having 70-75 percent of vehicles in the hatches, this percentage is going to drop as we go along. Going forward, it can be expected that the vehicle portfolio of Maruti will consist of more high-end vehicles."

He further said that Maruti will launch more SUVs in 2023 and 2024 and the company will continue to make vehicles required in the small car segment to make sure that they can fully utilise their production capacity and meet customer needs.