Maruti Suzuki’s parent Suzuki Motor Corporation (SMC) has decided to go ahead with its target of selling five million cars in India despite the ongoing slowdown and rising competition from Korean and European brands.
The sales target is nearly triple than what Maruti sold in India during FY19. The Delhi-based maker of Swift and Brezza clocked sales of 1.75 million units, a growth of 6 percent year-on-year.
Toshihiro Suzuki, representative Director and President, SMC, stated in the latest annual report, “Around 2030, the Indian market may grow to a scale of 10 million units. If the group can maintain its current share of 50 percent, it will have a size of five million units. With the assumption that the group will sell two million units in other markets, overall sales of the group will be seven million units.”
Maruti closed FY19 with a market share of 51.21 percent. By November-end, its share fell 50 percent as the drop in volumes was higher than that of the industry at nearly 21 percent compared to 18 percent recorded by the industry, data supplied by the Society of Indian Automobile Manufacturers (SIAM) revealed.
While battling the dilemma over its future presence in the diesel engine category for small cars, Maruti has to also boost its presence in the rapidly evolving electric vehicle market. India is set to get about half a dozen electric vehicles in 2020 itself, including one from the auto major.
“The automobile industry is undergoing a period of great transformation. In this period, it is necessary to have a concrete vision of what the company should be 10 or 15 years into the future and go back to the present from there to consider what the company should do from now, instead of merely continuing as we are,” Suzuki added.
Maruti’s volumes fell 20.77 percent to 941,776 units during the April-November period, while that of its closest rival Hyundai dipped 8.3 percent to 339,044 units. Industry volumes during the period fell to 1.88 million units.
Among other factors that impacted Maruti’s volumes was the heightened levels of competition, especially from Hyundai and Renault. Newer companies including Kia Motors, PSA (Citroen) and MG Motor as well as existing companies like Volkswagen, Honda and Renault will crank up rivalry further. Nearly half a dozen carmakers from China are also waiting to enter India.
“We believe that committing to the Indian market will lead to growth in other markets, through deploying the developed products worldwide. Compared with now, it is totally uncharted territory that is more than twice as large. All employees, including the management team, will be required to change their mindset and distribute the management resources effectively . Instead of top-down management waiting for direction, each and every member of the Team Suzuki will be responsible to propose voluntarily, have numerous discussions, set the vectors in the same direction, and tackle challenges as one,” Suzuki added.
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