‘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. | Watch it here. 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.

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

India's largest car maker, Maruti Suzuki has plans to maintain its market leadership by staying in step with the changing demands of time.

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