Low cost, small cars necessary, any demand setback won't change strategy, says Maruti's RC Bhargava

FY24 was the best in the history for the company, said Maruti Suzuki's chairman RC Bhargava, as the company proposed a record dividend of Rs 125 per share

RC Bhargava, the Chairman of India's largest car company by market share - Maruti Suzuki - has reiterated the commitment to small cars in India, and said that any lull in demand will not alter the strategy in this direction.

"We firmly believe that low cost, small cars are necessary in our economic and social conditions. A temporary setback in demand not going to change our strategy," RC Bhargava said at Maruti's 43rd AGM on August 27. "We are confident that the rural market will revive and many scooter owners there are looking to upgrade to small cars," Bhargava added.

The car company has proposed a record dividend of Rs 125 per share, calling FY24 the best year in the history of Maruti Suzuki.

Maruti's Green Push

Talking about Maruti's electric vehicle plans, Bhargava said Maruti's first EV will be produced in a few months' time and will be exported to global markets. The car company is aiming to export 20 percent of its production of 4 million vehicles by 2030.

Bhargava reiterated Maruti's commitment to cut fuel cost and emissions through its hybrid cars, and said the company is 'betting big' on that. "EVs are likely to be adopted gradually over the years, as the challenges facing the consumers are overcome. There can be little doubt that during the period this happening all other vehicles also need to become cleaner."

Rural Expansion

Maruti Suzuki also assured investors of deeper network expansion in smaller towns going forward. "Further strengthening our sales and service network to rural areas and small towns so benefits are not limited to people in large towns," said RC Bhargava.

"A small delay has taken place in finalising the site for our new one million unit expansion. We are making our best effort to come to a quick decision in this matter," Bhargava added.

Clearing Inventory Glut

Taking corrective measures to clear vehicle stockpile, Maruti chairman assured that the company's stock levels have always been at 38-40 days, and it is gearing up for clearing the inventory by the festive season.

Federation of Automobile Dealers Associations (FADA) had earlier this month said claimed on record that the vehicle inventories have climbed from 65-67 days in early July to 70-75 days in August, at over Rs 73,000 crore of pending vehicles.

Gender Parity

Bhargava said the names of two new independent directors, both women, have been proposed for approval by the shareholders, in order to improve the gender ratio in the company. The Board will now have three women directors.