Maruti Suzuki to roll out two SUVs, one LCV in FY16

Maruti Suzuki to roll out two SUVs, one LCV in FY16

Maruti Suzuki to roll out two SUVs, one LCV in FY16
India’s largest carmaker Maruti Suzuki India is planning to take a deep dive into the sports utility vehicle (SUV) segment with two launches this year.

The year will also see MSIL cruising into the light commercial vehicles (LCV) space with the introduction of a one-tonne LCV.

MSIL Chairman R C Bhargava is bullish on the company’s growth prospects and expects it to grow at 10 per cent this year. He, however, feels there won’t be a significant increase in demand for cars in the country unless the economy starts growing faster. Though the economy has started looking up, the manufacturing revival is yet to be realised.

In an interview with Deccan Herald’s Annapurna Singh, Bhargava spoke on a range of issues from lowering of interest rates to give the much needed boost to the automobile industry to making safety norms mandatory.

Excerpts from the interview:

There was news recently that Maruti is planning to get into commercial vehicle (CV) space after increasing its market share in the large sedan segment with Ciaz. Could you elaborate on the expansion plans of Maruti Suzuki India ( MSIL) in 2015-16?

Maruti is planning to enter the SUV segment in 2015-16 with possibly two launches in the year. We will also launch a one-tonne light commercial vehicle (LCV). There would be some new models/variants in the car segment. We expect about 10 per cent growth. The LCV will initially be introduced in a limited manner so that we can gain some experience in this new segment. There will be separate outlets to sell LCVs, but they will be run by existing dealers. Cars and LCVs should not be sold from the same outlets. The LCVs are also going to be exported as we think there is a good market for them in the developing world.

Auto industry suffered one of the worst slowdowns in the past couple of years. It has, however, started looking up in the past couple of months. Do you think the auto industry is out of the woods now?

There is not yet any significant increase in car demand for the industry. The revival of the auto industry depends on many more people being able to afford  a car. That means faster economic growth and more job creation. Revival of manufacturing is essential. It has not happened as yet.
The Reserve Bank of India has lowered interest rates twice this year but banks are yet to pass on the benefits. Is that hurting your business? 

Lower interest rates result in lowering the cost of financing for customers, and so help sales. However, MSIL has had reasonable growth in 2014-15 despite higher interest rates.
How much do interest rates make a difference at all for manufacturing?

As I said, they make it easier for customers to buy cars. Since Maruti does not borrow money for production, interest rates do not affect us.

Some talks began in the Modi-led government about the recall of 15-year old vehicles but it has not gained momentum since. As India’s largest car maker, what is your view?

There is need for strict enforcement of vehicle fitness norms, in the interests of safety and environmental protection. Recall of vehicles is not necessarily the correct answer.
There is lot of emphasis in the new government about ease of doing business. As a corporate, do you feel things have turned out better than in the past years and things are really moving on the ground?

Some changes have taken place, but the majority of changes required are within the jurisdiction of state governments. I am really not aware of what different states are doing to make manufacturing more competitive.
Could you throw some light on the products expected from the Gujarat plant?

We are yet to take a decision on this matter.

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