Maruti Suzuki India is heavily committed to hybrid and optimistic new models will drive growth

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Retail sales have lagged behind wholesale numbers for some of the key trends in the passenger car market. This is mainly because OEM production could not meet actual demand. Maruti Suzuki India sees this as a challenge for OEMs: “A major challenge for OEMs in the upcoming holiday season is managing production in line with the underlying demand pattern. People would like to take the vehicle of their choice,” says Shashank Srivastava, ED, Maruti Suzuki India.

The Indian passenger car retail trade is on a robust growth path. In fact, in the first four months (April to July) of FY2023, car wholesale trade totaled 12,04,296 units, which could easily be among the segment’s best performers despite the numerous challenges/disruptions the segment is facing Industry.

In fact, one of the key growth drivers for the personal mobility segment has been the launch of new models, particularly in the SUV segment, which has led the rise in PVs. Currently, the first four months of wholesale shows that SUVs now account for 49.95% of total car sales, while passenger cars account for 46.08% of sales. The rest comes from the van segment.

This is where Maruti Suzuki India is now preparing to play a bigger role. The Maruti Suzuki Grand Vitara, which was recently unveiled and is expected to launch in the coming months, is the company’s new game in the SUV segment, an area in which it is trying to regain lost ground. When asked about the revival of the Grand Vitara name, Srivastava replied, “We came up with many names for Grand Vitara, but Grand Vitara stood out because, firstly, the hybrid SUV unveiling was a global unveiling. Much more than India, it has a very strong connection with the DNA of SUVs worldwide. Second, Grand Vitara from the Suzuki family was a very successful product. And that’s one of the reasons we chose the Grand Vitara name.”

In 2009, Maruti Suzuki India first brought into the country the Grand Vitara, which was its first and only full-size SUV sold in its portfolio. But it failed to catch on due to the high price (about Rs 25,000) as it was brought under the CBU (Completely Built Unit) route, which entailed higher import duties and secondly, it had low fuel consumption, an area where Maruti Suzuki products are manufactured are different.

Big bets on hybridization
According to Maruti Suzuki India, while global legislation, environmental concerns and stricter emissions standards will make electrification a reality, the exact timetable may still be uncertain.

“The overall analysis based on acquisition costs, which takes into account currently available cell technology, price per kWh, range and charging infrastructure, will penetrate between 10% and 15% of all EV PV sales by 2030,” Srivastava pointed out.

Srivastava stated that about 38 to 40 million new cars are expected to be sold in the next 10 years, of which 1 to 2 million will be electric vehicles. The question then is what can be done with the balancing vehicles while balancing environmental concerns.

“The RDE standards will come into force next year. You will see an increase in vehicle prices. Electric vehicles are currently around 50 to 60% more expensive than their petrol engine counterparts. While hybrids are also expensive, they are still cheaper than electric vehicles. Second, they don’t need to be charged for hours. Thirdly, especially with strong hybrids, you do not have to pay for charging. Finally, the performance is great because you know that in a typical urban drive cycle the vehicle is running on battery about 40-60% of the time in that sense, it’s like a mini EV,” added Srivastava

According to Srivastava, this is also a win-win proposition on the performance front. It starts with the high torque of EV mode, which is very quiet. When extra power is required, such as when overtaking, you have petrol and the battery, both of which power the wheels. “It’s a great mix and if we’re able to get that across to consumers then I’m sure people will take notice and by the time EV adoption becomes mainstream, they’re going to embrace the powerful hybrid.” decide,” stressed Srivastava.

Is it the end of the road for the entry-level segment?
Looking at retail sales figures while overall four wheeler sales are growing at a robust pace, it is evident that there is a slowdown in the entry-level segment, especially given the lack of new models being introduced, OEMs discontinuing models, etc.

2022 Old K10

The Union Minister for Road Transport and Motorways, Nitin Gadkari, recently called for the introduction of 6 airbags in all passenger cars. While the intent behind the scheme is good, it also poses a technical challenge for existing vehicle platforms that need to be upgraded to accommodate 6 airbags without compromising vehicle integrity. Asked about Maruti Suzuki India’s perspective, Srivastava said, “Safety is very important and a concern not only for governments, consumers, OEMs, but also for us at Maruti Suzuki. It has the highest priority in our vehicle design. There are 6 airbags in many of our models, but at the lower end consumer price sensitivity is a bit higher and therefore the affordability factor may drop. The price increase in entry-level vehicles is not only related to the airbag, but to general factors. Commodity prices are increasing not only because of some regulatory changes but also because of the transition from BS4 to BS6.” He underlined the importance of affordability when it comes to entry-level demand and that’s something we need to look at.

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