‘By 2030, Maruti Suzuki will export 8 lakh cars annually’: RC Bhargava

The automobile sector is busier than ever before. India’s passenger car sales in FY 23 were close to 4.1 million. Car sales are likely to maintain an up move in the coming years in sync with growing GDP. In an EXCLUSIVE interview with Republic Business, RC Bhargava, Chairman, Maruti Suzuki India, shared a roadmap for the leading car manufacturer of the country, its EV manufacturing plans and more. | . Edited Excerpts:

Republic Business: Taking you back to the 1980s, when in 1983, Maruti 800 was launched, it was an aspirational car for the Indian middle class. But over the last 40 years, the very sense of aspiration in India, especially with regard to private vehicles, has changed a lot. So now, where do you see Maruti positioning itself in the current Indian scenario?  Is it affordability or is it aspiration? Where exactly is Maruti Suzuki as a brand now present in the Indian market? 

RC Bhargava: India has changed a lot in these 40 years. It's not only the automobile market and the aspirations of people regarding cars. It's the aspiration of people generally which have changed a considerable amount, especially in the last 10 years or so.   And when we started, India didn't really have an automobile industry worth the name.  And that time the government wanted to start this car because they wanted a small car in a sense to continue the project which Sanjay Gandhi had started.  And we started with a small car and that revolutionised the entire industry. But as the years have gone, the economy has changed, the living standards of people have changed, the knowledge levels have changed. The whole information technology has made the whole country and the world a different place. And today there are not one but perhaps three markets in India.  Maruti as a car manufacturer has to meet the requirements of its customers in different segments of the market. And therefore, our policies, our strategy, our product design are all directed towards the object of meeting the aspirations and the requirements of customers who are in these different segments of the market today. Right from the top, people want very nice, big SUVs, down to the people who are still coming up from the two-wheeler market and who still want small cars. So we are catering to all segments of the market. And we'll continue to do so.  

Republic Business: Finally, Maruti is entering the SUV market later this year with its first electric vehicle. What other launches in this series can we look forward to?  

RC Bhargava: No, there was never any doubt that Maruti would get into the EV segment. We have always been moving towards that. We had earlier made an EV out of the Wagon R, but that was ahead of the market. It was too costly for the market at that time. And so that didn't work. Then we went back and started looking at what the customers would really need and where should we position ourselves in the EV space so that our products would best meet the requirements of people who could afford to, who wanted to, and who would be the main customers for EVs. And it is in that context that the EV program has been designed and where we will be coming out with the first EV in about a year's time or so and following this with three more EVs till 2030-31.  

Republic Business: Three more EVs and they are all in the SUV segment or what is the segment?

RC Bhargava: We don't talk about the vehicles and their designs and things in advance. I think that's something which will remain area of guesswork for most people as to what kind of vehicle we will put out. But yes, the first one is likely to be an SUV type.  

Republic Business: Is SUV like a flavour of the season? Like it's like in fashion? Or do you think it's going to be a trend which will perpetuate, and people will continue to buy it for safety reasons or whatever?  

RC Bhargava: SUVs have been there only for not too many years. They have been here just a few years. And I think they will continue to be the requirements of the people for some time to come. I don't think SUVs are going to disappear in the next two or three years. I think they will be there for some time. And that is evident from the fact that almost every car maker in India today is introducing new models of SUVs in different segments of the market.  

Republic Business: Talking about EVs, the penetration of EVs in India, there were very ambitious plans, but it's still very slow.  Do you think that we have the right infrastructure yet or policy support yet, that is required for the speed at which we want the EVs to be seen on Indian roads?

RC Bhargava: No, I think the reason why Maruti was a little bit delayed in getting into EVs in the market was because we felt that conditions in India were not appropriate for a rapid increase in the move towards EVs. And there are many reasons for that. And I think most of us are aware of the reason why customers, not only in India and I hope you know that recently in most parts of the world, but there has also been a lot of rethinking among customers about EVs. Demand has been falling. It's not as if the world is continuing a sort of stampede towards adopting EVs anywhere. Even in China, the demand has fallen off. And that is because there are still issues relating to EVs.  If we look at EVs as a vehicle which is supposed to give us carbon neutrality over time, there are issues in that as long as you have energy generation which is not totally from clean sources. Because the energy which the EVs will be running on will not be clean. Therefore, the EV doesn't remain clean. There are issues of affordability. There are issues relating to range and the range which varies with temperature. There are issues of safety. So, there are many issues relating to EVs which customers over the world are still grappling with. And that's happening in India. Our approach, as we have said many times, is that in the Indian context, looking at the Indian resource endowment, looking at the way the Indian customer is segmented in this country, and the fact that we have a large small car market,  the correct approach for us will be to adopt different technologies and different fuels, whether it's hybrids, whether it's ethanol, whether it's biogas,  whether it's CNG, and use all the available technologies to achieve the goal of carbon neutrality. And that is the route we are going to follow. We have been following that. There will be EVs, but along with EVs, customers will have other choices also.

Republic Business: How do you plan to keep prices regulated while complying with government regulations?

RC Bhargava: When there are safety features available which can be put onto cars, it would not be appropriate for government not to regulate to put those safety measures in the car. Because it would then be accused of catering to populism or something. and not looking after the safety. I think the regulation which government has brought in are appropriate. What we have to now wait and see, and that is my view, is that as the income levels of people go up, they will then again now get to the stage where small cars with all the regulatory conditions met will again become affordable to them.  When the regulatory measures came, the price went up suddenly and a whole lot of customers lost affordability. But that's not a permanent thing because the Indian economy is on the move.  Indian incomes are rising. The car incomes relating from these regulations is not rising. And therefore, over time, the gap will be closed, and people will again start buying smaller cars because the two-wheeler owner ultimately has to upgrade to a four-wheeler. He cannot continue and all people can't continue two-wheelers all their life.  

Republic Business: Maruti has, I think, been exporting to over 100 countries. So if you can tell us a little bit about your global footprint going forward.  

RC Bhargava: You know, with the way the global situation is changing, Sharmila, export opportunities, especially for the smaller cars, are growing tremendously, especially in the whole of the African continent. You go to South American areas, some parts of Southeast Asia, people are still beginning to motorise. There are a whole lot of...people who don't have the means of  buying  expensive  $50,000  cars.   And in those areas, India has the best advantage of  all  people  because  we  have  the  volumes  which  will  enable  us  to  manufacture  small  cars  at  comparatively  low  cost  and  they  are  of  global  standards  in  terms  of  quality  and  performance.  That’s the  reason  why  both  Suzuki  and  even  Toyota  are  sourcing  cars  from  India  to  meet  the  requirements  of  the  customers  in  different  parts  of  the  world,  which  I've  mentioned.  We expect that  by  2030,  31,  exports  from  Maruti  will  increase  from  the  present  volume  of  about  260,000  cars.  They will go  up  to  750- 800,000  cars. These will include EVs, by the  way. 
 
Republic Business: Maruti has made stupendous sales last year.  You have hit  double  digit  sales  figures  last  year.  Do you see yourself maintaining  that  sort  of  sales  growth  in  the  coming  year  and  then  after?  

RC Bhargava: Well, I think as  the  economy  grows,  the  demand  for  cars  will  grow  in  the  country  because  normally  there  is  a  correlation  between  the  rate  of  growth  of  GDP  and  the  rate  of  growth  of  cars.   I expect that our GDP growth  will  be  in  the  high  single  digits  if  they  don't  reach  double  digits.  I think India has the potential  to  get  to  double  digits  But  it  requires  a  certain  amount  of  change  of  attitudes  on  the  part  of  our  entrepreneurs  and  the  people  who  are  managing  industry.  But the younger generation is showing  enormous  appetite  for  growth.  So I think GDP will  grow  faster  and  faster  as  we  go  along.  And along with that, the car  industry  will  grow.  And the car industry will, of course,  have  to  meet  with  all  the  requirements  of  the  environment  and  safety  and  all  of  that.