Suzuki Motor Corporation (Japan), the parent company of Maruti Suzuki India (MSIL), on Thursday said that it needs to rethink its strategy as ‘the business environment has changed due to declining market share in India and intensified competition in electric vehicles (EVs)“.
The Japanese auto major has also changed its plans to launch number of EVs to four instead of six vehicles by 2030 including a small hatchback, premium hatchback, SUV and multi-purpose vehicles /vans (MPVs), as announced in January 2023.
The company said: “(It has) Achieved revenue and profit targets ahead of schedule by improving sales mix and quality, and the effect of exchange rate, etc. even though sales volume target could not be met…On the other hand, the business environment has changed due to declining market share in India and intensified competition in electric vehicles. Need to rethink strategy.â€
As part of its management strategy, the company said it aims for profit growth through improved profitability by increasing sales volume and product and brand value amid an increase in the EV ratio, increasing labour costs, rising material costs (strengthening the supplier foundation, increasing in raw materials, energy cost, etc.), and other factors.
SMC will make necessary investments to achieve higher profitability in the first half of the 2030s, it said.
Some of the strategies it outlined include stabilising global supply by appropriately allocating production capacity based on the principles of local production for local consumption, developing powertrains in consideration of carbon neutrality targets, and considering infrastructure conditions in each market.
It aims to get back to 50 per cent market share as the market leader in the Indian automobile industry from around 42 per cent currently.
While it said that India will continue to grow and serve as the engine for Suzuki's future growth, it added that competitive environment is becoming “increasingly severeâ€, and the quality of product functions, equipment, and services required by customers is increasing.
Therefore, for a continuous growth, it will strengthen its product capabilities and lineup in the sports utility vehicle (SUV) and MPV segments, rapidly develop and introduce entry-segment products that meet the preferences of entry-model customers, and introduce EV and other alternative fuelled vehicles, best suited to local conditions for each region in India, it said.
By 2030, the company aims to garner 25 per cent of its total sales from vehicles powered by Ethanol blended fuel (Flexi fuel or E20), 15 per cent from BEVs, 25 per cent from hybrid electric vehicle (HEV) and the rest 35 per cent from CNG, the company added.
In its New Mid-Term Management Plan (FY2021-FY2025), Suzuki Motor Corporation (SMC) said it will introduce battery electric vehicle (BEV) and other alternative fuel powered vehicles (HEV/CNG (CBG)/FFV, etc) “best suited to local conditions for each region in India,†adding that it will expand “BEV lineup starting with e Vitara, aiming to launch four BEV models by FY2030 (e Vitara, mini commercial van BEV).â€
As part of its business strategy and initiatives, it will improve Maruti Suzuki's product planning and development capabilities to develop and introduce products that better match the preferences of Indian customers in a timely manner, SMC said.
However, SMC also noted that it will introduce six BEV models by FY2030 including the two models within FY2025, as mentioned above.
