Maruti's first EV will not be priced below Rs 10 lakh, says Bhargava

RC Bhargava, Chairman of Maruti Suzuki

Contrary to the buzz that Maruti Suzuki India Limited (MSIL) electric car will be priced in the range of Rs 7.5-10 lakh, chairman RC Bhargava told shareholders at the 41st annual general meeting (AGM) on August 31 that the vehicle will be priced at the "upper segment" of the market.

“EV production will happen at the Suzuki plant in Gujarat, and we expect them to roll out by  (FY) 2024-25. They will be at the upper segment of the market. We are not going to start at the lower end of the market,” said Bhargava, as he faced multiple questions on the company’s electric vehicle roll-out plan in the medium to long term.

When Moneycontrol reached out to him, Bhargava did not share the price but confirmed that the car would not be priced under Rs 10 lakh in spite of heavy indigenization.

Bhargava’s statement comes at a time when automakers such as Tata Motors and Mahindra (M&M) are aggressively expanding their EV portfolio. Other players like MG Auto, Hyundai India and  Kia India are also gearing up to launch their electric cars (e-cars). Overall, nearly 25 e-car rollouts are in the pipeline over the next two years or so.

“We hope to get good customer acceptance in the market (because) these have been carefully designed and made. There will be a fair degree of indigenization because of the battery plant that Suzuki Motor Corp is setting up in Gujarat,” said Bhargava, fielding questions from shareholders.

Maruti Suzuki's parent company Suzuki Motor Corporation (SMC) recently announced an investment of Rs 7,300 crore to set up a facility at Hansalpur, Gujarat for manufacturing Advanced Chemistry Cell (ACC) batteries for electric vehicles.  The facility was inaugurated by Prime Minister Narendra Modi on August 28.

At the last year’s AGM, Bhargava said MSIL would not enter the EV space in the short term.  The chairman of the country's passenger vehicle market leader had stated it categorically that the company would start selling EVs only when there was "reasonable volume" and would not "incur losses".

Talking about other green initiatives, Bhargava revealed, “We are also going ahead with the green energy programme by rapidly increasing the production of CNG cars to 4-4.45 lakh units per annum (this fiscal). That is a big jump from 250,000 units (produced) last (fiscal) year. We could have done much more but there are some shortages in critical components on the CNG side too.”

While acknowledging the sharp fall in net profits and sales, India's passenger car leader heaved a sigh of relief as sales are rebounding owing to the abatement of the semiconductor crisis as well as the continued moderation in raw material prices.

“From 2019-20, while MSIL sales dropped 16 percent, the industry as a whole dropped 18 percent. The drop happened because of the price increase that necessitated owing to switchover (from BS-IV) to BS-VI emission norms . Thereafter, the Covid had struck  from 2020-2021,” added the chairman of the company.

It may be recalled that the BSE-listed carmaker saw its overall marketshare decline from an all-time high of 51.21 per cent in FY 2018-19 to 43.38 per cent in 2021-22 .  During FY 2022, its consolidated net profit was Rs 4,389 crore in 2020-21, which went down by nearly 12 per cent to Rs 3,879 crore in FY22.

“During this period there was a semiconductor shortage all over the world. So we were not free from the loss of production that was happening in virtually every company, stated Bhargava, adding,  "Now all that is behind us and our marketshare will increase as we expand our presence vehicles into the sports utility vehicle (SUV) segment,” he further stated.

At the first physical AGM after two years following Covid, he reaffirmed that MSIL aimed to increase production to 2 million (20 lakh units) in the current fiscal, largely owing to the greater availability of semiconductors.

He also said during this financial year, MSIL’s contribution to Suzuki's global production would go beyond 60 percent, which was achieved last year.