SUZUKI FAN » Auto interview

Maruti Suzuki chairman RC Bhargava interview with CNBC-TV18

admin — Wed, 08 Sep 2010 01:31:56 +0000

Below is a verbatim transcript of Maruti Suzuki chairman RC Bhargava interview with CNBC-TV18’s Latha Venkatesh and Anuj Singhal.

Q: You all have had a fairly strong first five months of the year. Is that what is inspiring the confidence for capacity expansion? Give us some details of what is on the anvil?
A: That’s not the reason because this has happened now. We have been seeing that since last year the Indian car market has been growing strongly. All the factors seem to indicate that both the economic growth and along with the growth of the car industry will continue at a fairly high rate in the coming years. That is why we had gone ahead with our second line which is now under implementation and which will get commissioned at Manesar in the second half of 2011-12.
What we have now got also is in-principal approval from Suzuki Japan, to go ahead and take up in the board the approval of the third line also in Manesar. This will mean that the second and third line which will come up in Manesar, will add half a million cars of installed capacity.
Usually we expect that with half a million installed capacity, our people will ultimately produce 600,000 to 650,000 cars out of that. That is to take care of possible increases in capacity. At the same time as Mr Suzuki mentioned, the first original line in Gurgaon has gone quite old now and the time is coming when that one will be required to be scrapped and a new line built.
Whilst that happens then we need some surplus capacity from somewhere else otherwise we will run short of capacity again. That’s the other factor which is driving this. We also came to the conclusion that doing civil work for the third line along with the second line, was in all ways the right solution, both in terms of cost as well as in times of keeping dust and other levels down. So there is a technical reason also.

Q: Can you give us some kind of a timetable? How much of excess capacity comes in when the second line goes into operation in the second half of next year and what is the capacity that the third line will add? Would 2012 be the year when you will have this entire half a million capacity coming in?
A: We don’t know the exact timing yet because while the civil works are being started and they will be ready quite soon after the second line is commissioned. The board has yet to approve the third line and then the orders for equipment have to be placed. We have to check with the order and the suppliers as to what is the delivery time they will quote to us. There is a little bit of uncertainty there but usually I would expect that probably by the end of 2012, I can’t predict the exact time but something around that time.

Q: Right now your sales rate is about 100,000 units per month and your capacity is about 1.2 million. You are almost running at peak capacity. When this new line comes in what could be the sales guidance in terms of volumes per month. Would it increase significantly going by the demand situation right now?
A: This will increase our capacity by 250,000 a year, but it’s still a full year from now before we even start on getting anything out of this line. It will be only early 2012 that all the facilities will get completed. Now there will be a growth in this period which could be anywhere from 12% to 20%, I don’t know what the growth will be. The existing 100,000 per month will any case go up to something like 115,000-120,000 in one year’s time.

Q: Rs 1900 crore is not a great deal of money especially if you have a timeline of over a year. Any plans of how that money is raised? Is it internal accruals only?
A: We have at this point of time over Rs 7,000 crore of cash available with us and we add something close to Rs 3000 crore a year of internal resources every year. No, we will raise nothing from outside.

Q: Do you think this will become the catalyst for more such expansion news that will come from others in the industry as well. After all capacity constraint is there and especially among the components makers. Do you see this generating some expansion announcements in the component industry at least?
A: The components industries must take note of what we are doing and expand along with us. Otherwise there will be problems. If we create half a million extra capacity in the next two years and this doesn’t happen with the component manufacturers then there is an issue.

Q: One issue which has bothered investors after your quarterly numbers was the royalty issue. There is still no clarification on that in terms of when is that going to end. There was some talk that maybe three-four years down the line, you may actually develop your in-house technology and may actually get royalty from Suzuki. Can you take us through any timeline on that front?
A: What we have yet to work out with Suzuki is that when models are developed partly in India and partly in Japan, then how the royalty will be adjusted to take into account the work done in India. That discussion will take place but as you know developing models in India will still take some time off.
The Rohtak plant at the moment only has a boundary wall. It doesn’t have much more than that. Test track and other facilities are yet to be developed in Rohtak. This will of course happen. It will be illogical if one was to say that work will be done in India but royalty will be paid for that, that won’t happen of course.

Q: For rest of FY11 and FY12 we can assume that the royalty according to what happened in the first quarter?
A: The first quarter had an arrear component in it also. The arrear component has to be excluded because that won’t arise in the future. But the amount of royalty to be paid will depend on the volume of production which takes place and to an extent it will be determined also by the exchange rate.
Q: The yen is becoming an expensive currency?
A: Yes, but I don’t know how the yen will behave in the next 12 months.

Source: CNBC-TV18’s

Question and Answers With Suzuki CEO in Latest Visit At Maruti Suzuki

admin — Wed, 08 Sep 2010 01:12:53 +0000

Osamu Suzuki on in an interview with Sindhu DNA. Excerpts:

On the Volkswagen deal and the strategy to operate two brands, VW and Suzuki
Volkswagen bought a 19.9% stake in Suzuki for a certain amount. Half of the proceeds will be used by us to buy shares in VW. Till date, we have acquired 4 million VW shares and plan to take up our stake in that company to 2% (not larger because the equity base of that company is very large). The remaining 50% money will be used by us to buy equipment.

On joint product development between VW and Suzuki
Let’s be very clear that there will be no selling of each other’s vehicles. Before we get to joint product development, common components have to be developed. That would be the starting point. No, a concrete plan isn’t ready yet on this. It is wise for Suzuki and VW to jointly develop components for vehicles which sell large volumes. VW is selling greater volumes in China so Suzuki can use components from China through VW; this will bring down costs. But whether Suzuki makes common use of VW in China of VW uses Suzuki to source components from India … there has been no discussion between the two partners on this as of now.

On whether Maruti will look to alter shareholding in component companies in India under the joint sourcing plan with VW
We are not thinking of either increasing or decreasing stakes.
On the contours of joint product development with VW
In case we do joint product development, then these products would be sold globally. Of course, vehicles we sell together in US, Europe, Asia, Indonesia, Thailand and Brazil will of course be different products.

On hiking stake in Maruti Suzuki
As of now we have a 54% equity and whether we will increase this or not will depend on investments in equipment. It could be increased or even decreased. We have not taken a decision as of now.

On the fate of Maruti-Nissan contract manufacturing alliance after VW became a shareholder
Globally, Suzuki is a contract manufacturer for four companies – Nissan, Mazda, General Motors and Fiat. But from India, we do this only for Nissan. In all these instances, Suzuki has a very good relationship with the companies that source vehicles from it. But for the Maruti-Nissan alliance, it is difficult for me to comment on what will happen in future. They (Nissan) should be willing to buy and we should be willing to make products for them.

On whether VW will become fifth company to source vehicles globally from Suzuki
Not as of now, but if in future VW wants to buy vehicles from us, we will decide the terms and conditions (for such a contract).

On whether capacity expansion is being done late in India
We can’t say that the capacity expansion announcement has come late or that demand has grown too early.

On whether Suzuki is working to develop new diesel engines
So far as the Fiat 1.3 litre engine goes, we have a contract. We continue to manufacture this diesel engine under license from Fiat, but depending on requirements in India, we will take a call (on whether to make new, different diesel engines).

On increasing competition in India, the arrival of the Tata Nano and Maruti’s future strategy
We have 12 models as of now and need to increase this number. We can see these either in terms of cc or classify them as hatchbacks, notchbacks etc. Our effort is to manufacture models which are saleable in India. We are not thinking in terms of cc. One more thing: we have no plans as of now to make a product smaller than 800 cc which is already available in India.

On how is Maruti contributing to Suzuki’s global sales and turnover
As of March 2010, Suzuki’s consolidated sales were about 2.5 trillion yen whereas Maruti’s topline was 600 billion yen. So Maruti’s turnover constituted about 25% of Suzuki’s turnover. In terms of sales, Suzuki sold 2.3 million vehicles globally last year of which Maruti’s contribution was a million units.

And Maruti’s weightage in Suzuki’s portfolio will only increase in future because of exchange rate fluctuations and a stable rupee-yen relationship. But Suzuki is also building a Rs 1,925 crore plant in Thailand which comes on stream in 2012 so Maruti’s weightage may change yet.

On his own forecast for India’s car market size in next few years
If Suzuki were the lone car maker in India, we could have predicted growth. As of now, we see annual growth rate of 10% but growth is quite rapid for India so very difficult for us to give an estimate.

On product strategy globally and for India in the medium term
Right now we are focused on 1000-1300 cc space. But if there is demand for bigger vehicles in India going forward, then we will make them.

On his succession plan at SMC now that he has turned 80
I am healthy yet so will continue (to head the operations).

Source: DNA

Interview with I V Rao, Managing Executive Officer, Maruti Suzuki

admin — Tue, 31 Aug 2010 02:01:35 +0000

Interview with I V Rao, Managing Executive Officer, Maruti Suzuki

India’s largest carmaker Maruti Suzuki created a history of sorts by selling over 1 million cars last fiscal. It was the first Indian automaker to achieve the rare feat of selling over a million units during one fiscal.

With the country’s best-selling model Maruti Alto in its armour, Maruti Suzuki, owned by Japanese automaker Suzuki Motor Corporation, eyes sales of 1.2 million units this year. It also plans for a ‘Made in India’ car in the true sense of the term by 2012 for Indian market and another brand new model by 2014 for Suzuki’s global markets.

However, the company’s Managing Executive Officer, I V Rao, who was in the city to launch Maruti Alto K10, an upgraded version of Alto, told Andhrabusiness.com that Maruti would not launch a rival for Tata Nano as such kind of a model would not be viable for it. He also talked about Maruti Suzuki’s Research & Development (R&D) activities, CNG foray and other issues.

Excerpts:

Does Maruti have any plans for a Tata Nano rival? If no, is there any particular reason for keeping away from that niche?

We are very clear on this. Maruti has no plans whatsoever to bring out a model that will compete with Tata Nano. We have decided to refrain from stepping into that territory as it’s not financially viable for us to manufacture and market a model at such a low price. Price factor is the main thing ,as it’s the deciding factor on the overall profitability of a product. So there is no way we are going to do a product like that.

You are saying it’s not viable to launch such a model. But how Tata Motors is able to do that?

I don’t know how Tata Motors is doing it. You have to ask them

There is a view that payment of Royalty and Technical Fees (RTFs) by Maruti Suzuki to its Japanese parent is costing the company dearly. What’s your take on this?

I don’t think it’s true. Increase in the cost of raw material is putting pressure on the margins of the company, as we don’t pass such burdon on to the customer everytime. As raw material costs form major chunk of our production costs, increase in their prices will naturally have an impact on our production expenditure.

You talked about Research & Development (R&D) activities at Maruti Suzuki. Are there any plans to reduce Maruti Suzuki’s dependence on its parent Suzuki Motor Corporation (SMC) for technology?

Maruti Suzuki is a part of Suzuki Motor Corporation. So, there is no way Maruti Suzuk will be weaned away from its parent in the area of technology. Our R&D activities compliment what SMC is doing in the area of technology development for new models.

For examble, entire upgrades for the Alto K10 are conceived and designed at our R&D centre.

We are also building a test drive at Rohtak in Haryana where a major R&D centre of Maruti Suzuki is coming up on a 600-acre site. The test track, once completed, will give huge fillip to our R&D activities and such facility is essential to design and develop new models.

We are making huge investment into the test track which will be completed by 2012.

Nearly 1,000 people are working for Maruti’s R&D activities and we plan to increase the employee strength to 1,100 soon. Though attrition rate is very low, it’s not easy to get good engineers. It takes nearly four years to properly train an engineer, but unfortunately they leave the profession and go for an MBA or other studies.

How is the work on Maruti’s ‘Made In India’ model going?

We are planning to launch the model in 2012. It will be made in India for Indian market. Nearly 150 engineers are working on it. We have not decided on the price and other details of the proposed new car. As our focus is always on compact car segment, it will be positioned in A2 segment.

How is the Maruti Suzuki’s partnership with Volkswagen going to evolve? Is there any manufacturing contract on the anvil?

As our Managing Director said recently, Maruti Suzuki has no plans to share platforms with the Volkswagen in the country. However, Maruti Suzuki’s parent Suzuki Corporation and Volkswagen are exploring various options of working together in global markets. It will take another fews months for the both companies to work out modalities on this front. However, I don’t think Maruti will share its platforms with the German carmaker.

Why Maruti is launching five CNG variant models on a single day?

Yes, we are launching those models soon. Maruti plans to tap the niche segment effectively. But it’s not an all-India rollout as CNG distribution infrastucture is not available across the country.

The company will focus on those areas where the requisite infrastructure is in place. So, we will concentrate on Delhi, Mumbai and also cities like Vijayawada for our CNG foray.

Source: andhrabusiness.com

Designed-in-India Maruti car by 2012 , plans 600 acres in Rohtak for development facility and test track by early 2013

admin — Fri, 21 May 2010 00:59:47 +0000

Designed-in-India Maruti car by 2012 , plans 600 acres in Rohtak for development facility and test track by early 2013
DNA india was interview with RC Bhargava, Maruti Suzuki chairman. here is the full story.

What is the status of Maruti Suzuki’s R&D efforts in India?
There has always been technical collaboration between Maruti and Suzuki. Our engineers started actively working with Suzuki in 2002 for a small car design.You may also want to see
Since then, various models like Zen, Esteem and Omni have come out with the contribution of local teams. WagonR Duo in 2006 is one of the success stories of Maruti engineers in India. The AStar showcased in Autoexpo in 2008 was completely conceived by our engineers.

With the implementation of BS-IV norms in the country from April 1 this year, all the modifications for our products to meet these norms are developed by our teams locally. Eeco van launched in January was totally re-engineered by our teams on Versa platform.

Knowing the Indian conditions well, what are you doing to handle the fuel economy issue?
Our K Series engine is a major step in that direction. Available in 1 and 1.2 liters, the engine is one of the steps in the direction of fuel economy. AStar, Estilo, Ritz and forthcoming new WagonR have the engine. With this lightweight, green, fuel-efficient engine, Maruti Suzuki’s R&D has been able to develop a new transmission system to improve overall performance and driveability of a car. Reduction of body weight is another major task the local teams are engaged in for improving the fuel economy.

What is the maximum mileage you are offering on your products now?
New Alto, we said, will offer 19.4 kmpl mileage. But, it is not the end of our efforts. We are still working on this issue.

Does that mean your future cars will promise more than 19.4 kmpl?
Yes, it will definitely go beyond that. But, we can’t put a number to that at this point. In fact, fuel consumption depends on several factors including traffic flow and congestion on the roads. From the design point of view, the aerodynamic shape of the vehicle, tyres and the body weight have an impact on the consumption. Engine too plays a key role in reducing the fuel consumption. We are working on these aspects at this point. But, future models will definitely give more than 19.4 kmpl mileage. We are working together with Suzuki teams on this issue.

What does that mean?
This means that there is an important task for Maruti R&D team to enhance fuel efficiency of cars by extensively using lighter material like aluminium and plastic to bring down engine weight and friction, enhance fuel efficiency and performance and also reduce emission.

What can we expect from the Indian engineering team next?
We are working on developing a new model using an existing platform. For this, entire concept is being designed in India. This car will be fully designed and developed in India. For this, we are also hiring professionals from across the world including the US and the UK. Anyway, the India developed car would hit the roads by 2012. We are following a full body change model. This means designing and development of a new body and interior over an existing platform and engine. This would result in evolving a new product identity, including changes to the layout, seating systems, internal and external fascia and basic body structure.

Which platform will you use for this new car?
We are still working on this. We have several alternatives. We have already achieved the production of one million cars in India. We will also be able to sell one million cars in India in the near future. For this, we need different models. Suzuki has several global models. Swift, SX4, Vitara, etc are some of those models. Alto, WagonR, etc are the other products we have again based on the Japanese designs. But, these models have been on 660 CC. This does not work here. So, we have to redesign the product to suit the Indian market conditions.

What is the status of alternate fuels in your products?
So far, the only alternate fuel has been LPG (liquefied petroleum gas). But, with the implementation of BS-IV norms, we have to switch over to gas injection technology. We have showcased that technology already. Compressed natural gas (CNG) will be the next big wave in terms of alternate fuels.

But, the availability of CNG has been a major issue. How will that impact your plans?
With the gas finds in Krishna Godavari basin, CNG availability is not going to be an issue. The availability of natural gas is going to improve. Even compared to LPG, the running cost on natural gas is going to be extremely low. We hope to launch our new models with CNG in the next six months.

Today every car maker is in the segment where you had almost a monopoly. What else should you be doing to get an edge over others?
We have about 50% market share in the country today. All international automobile companies have been in India for a long time now. They are also getting into the A2 segment slowly. But, we have understood the value proposition perfectly. Whether it is in terms of the availability of spare parts, service or the total cost of ownership, we have an edge over any other company in the market today. In fact, our effort is to focus on value proposition than on cost of ownership.

Does introduction of new technology mean increase in the cost of products?
Not really. Today the manpower costs in India, even at the high end of the ladder, are still lower compared to the global costs.

Would the India centre be the hub of technology for Suzuki too?
Today our entire focus is on developing technology as core competence. We just bought about 600 acres in Rohtak for setting up of a technology centre with an outlay of Rs 700-1,000 crore. Apart from the development facility, this centre will also have a test track and for the first time we will have facilities for crash testing. We can develop a complete car out of this centre. We hope to see this centre up and running in 2012-13. This centre will augment our facilities at Gurgaon.

Is it true that you are already putting in place the End of Vehicle Life (ELV) compliance for all your future cars?

We have already started on that though it is not mandatory in India at this point. The ELV compliant cars use negligible amounts of lead, cadmium, mercury and chromium. Current regulations in Europe stipulate the maximum amounts of these elements that can be used in a car. Maruti Suzuki vehicles that are exported meet this stipulation and are ELV compliant. By this, a vehicle has increased recycleability and promotes environment care. We are determined to bring such compliance to our full range of cars in India. We don’t plan to pass on the additional costs to make a car ELV compliant to the customer.

source: DNA india

RC Bhargava The Maruti chairman Interview on other maker to penetrate Suzuki 50% market share

admin — Wed, 14 Apr 2010 03:44:46 +0000

RC Bhargava The Maruti chairman Interview on other maker to penetrate Suzuki 50% market share

New Delhi: It is ironical that the same week Maruti Suzuki India Ltd chairman R.C. Bhargava released his book—The Maruti Story—the company announces the near-end of the iconic Maruti 800 (it is being phased out of 13 cities). The Maruti Story is an easy-to-read, first-hand account of the birth of the country’s largest car maker. However, the subtext of the book is in the strap line of the title, how a public sector company put India on wheels. It is a forthright account of the challenges of building a profitable PSU in pre-liberalized India. Bhargava tells Mint why, despite the announcement of its end, the beginning of Maruti will always play a relevant part in the story of India.

Is this the end of Maruti 800?

Toasting a partnership: The day Maruti signed the deal with Suzuki happened to be a dry day. Maruti booked a suite at Ashoka Hotel and somehow managed to get champagne to celebrate, Bhargava writes in his book. Ramesh Pathania / Mint
The Maruti 800 has not stopped. It will not be sold in 13 cities, though these are 13 large cities. There will be an impact, but we will continue with the 800 for another two years, at least.

The partnership with Suzuki was fortuitous. Tell us how it came about.

In 1981, when we started the project, we were looking at all the different options and had written to different companies in Europe and Japan. We then went to Japan for the Tokyo auto show and we met people from Suzuki. The response we got from them was wishy-washy, lukewarm. And we came away without any kind of further talk of continuing discussion. The only company that looked serious was Daihatsu, but later on it became clear that they were going to back out. So we were left with almost nothing. This gentleman, a director of Suzuki, was on a flight from Chennai to Delhi and then back to Japan (Suzuki and TVS already had a partnership for motorbikes) when he read an article in India Today saying Daihatsu was tying up with Maruti. The moment he landed in Delhi he called Japan and asked the top management—did you guys know about it and they had no clue. The people we met in the auto show were the Suzuki overseas engineering team—whereas our request should have gone to the overseas marketing team—that was the mix-up there. So Suzuki sent us a telex saying they would like to bid if it was not too late. That was godsend—at that point we had nothing in hand. Then we had to pretend that time was running out, there were others in the reckoning, etc. The Suzuki folks were here within two days and we had a meeting. That was how the partnership began.

Like the Maruti 800 in the 1980s, do you think the Nano would now be the game changer in the Indian car market?

The Nano has been around for nine months. But I don’t hear the buzz that is associated with a hit product. My knowledge is that if you want to buy a Nano today, you can go to a dealer and in about four weeks he would give you a car and all you have to do is bear the interest cost of the guy who booked the car and is not unwilling to flog off his booking. Any car which is in hot demand has a premium. The Nano does not. So that somehow makes me believe that this car requires more work before it becomes the phenomenon that it was touted to be.

Shouldn’t the sub-lakh car have come from Maruti?

No, because we came to the conclusion that we couldn’t do it. It was not possible to make a car that would meet with the standards which we feel a car should have at that price range. Otherwise, we would have reduced the cost of the Maruti 800. But we felt that it was just not possible to do it.

With the number of choices now available, do you think that Maruti has lost its relevance with the urban, young Indian?

The income levels of a lot of young people have increased dramatically in the last few years. Whereas earlier a guy who is in his early 30s would be very happy to be able to afford a Maruti, today he looks at a Toyota Camry or Honda Accord. Still there is a large bulk of Indian consumers who are not in that income bracket. And they are looking for cheap, affordable smaller cars. And whether it is Maruti or Hyundai or Tata, they all have a relevance. There has been full competition for 15 years and we still maintain 50% market share. Maruti hasn’t lost relevance and the customer has not given us up.

How difficult is it to maintain a long-standing partnership with a company that comes from a completely different business culture than ours?

The Japanese are different from us, yet they are much easier to work with in many ways. The big difference between Western companies and the Japanese is that the Japanese work much more on personal relationships and trust, whereas the Western companies are more contract oriented. What makes the Japanese guy trust you? They only look to see whether you are genuinely committed to the company before anybody else—including yourself. If they find that your priorities are more towards your own self, they will not trust you. For them the company is mai-baap, God whatever you want to call them. So they look for that in you.

My personal chemistry with Mr (Osamu) Suzuki became better over the years. On many matters I could persuade him to change his mind, which none of the Japanese could do. That’s because he trusted me, he knew that what I was saying was going to benefit Maruti and that I had no other agendas.

In hindsight, is there anything you wish you had done differently?

I got into a lot of issues with the government, there were CBI enquiries against me. Some MPs signed a petition against me alleging wrongdoings and most of this was because I didn’t succumb to political pressure and award contracts to people who had political connections. They caused a lot of stress and harassment. I wonder what I could have done and whether I could have avoided it. That was a terrible time in my life. If I succumbed to the stress and quit that would have been taken to be an admission of guilt. So I said I’ll fight it out. And Suzuki backed me fully—even at the cost of breaking relations with the government. As a public sector employee, where did I have the means to hire good lawyers? But Suzuki came in and helped. That’s the extent of how they back people. No Western company would do that.

source: livemint

New cars will help us retain leadership: S Nakanishi, MD & CEO, Maruti Suzuki Interview on future Model

admin — Sun, 17 Jan 2010 22:03:24 +0000

New cars will help us retain leadership: S Nakanishi, MD & CEO, Maruti Suzuki Interview on future Model.

As Toyota as well as from other global firms such as Volkswagen , Ford and Nissan. Terming 2010 the toughest year yet for the company, managing director and CEO S Nakanishi outlines the strategies that will help the company retain its leadership position in an interview with ET.

What is the big surprise for the Indian market as competition intensifies?

There are a lot of possibilities. The premium hatchback A-2 segment comprising of the Swift and Ritz is growing fast and possibly will emerge as the largest category in the next few years. We have to position cars in that league to excite customers to buy our cars.

What is Maruti Suzuki’s strategy for that?

We are setting up Maruti’s independent R&D facility, which should be the biggest outside Japan for parent Suzuki. It will help develop cars for the local market, keeping in mind expectations of Indian customers. The new generation cars will be fully developed in India and confirm to Indian tastes.

What kind of innovations could be expected?

As a market leader we have to stay ahead. While all other carmakers have copied our hatchback (Swift) to sedan (DZire) success story on the common platform , we may reverse the trend. Like our flagship sedan SX4 has a hatchback version in the developed markets and that possibility is not ruled out for the Indian market.

Does this mean that SX4 will have a hatchback variant here?

The Indian market is developed for bigger cars and customers like to be seen a big three-box car. Reversing the SX4 sedan into a hatchback might be tough. It could be taken differently. We will try to ascertain the market and customer mindset before taking any such steps.

But what are the plans to save your market share?

We will launch new cars in new segments to keep customers within our fold. The wide basket of products will have offerings in all the segment and while the entry level car Alto could be more price efficient. We are working with our component suppliers to get more economies in our components, the benefits of which would be passed on to customers.

Can we expect a locally made SUV from Maruti?

Nothing is ruled out. Any new product has to be based logically on right price and market demand. We have Gypsy but its has worn out over the years. We were considering assembling our compact SUV Grand Vitara in India but smaller volumes did not justify that. We have options to launch other small SUV Jimny, but all these options are still being worked out.

So you are targeting the multi-utility vehicle (MUV), the fast growing segment in India?

We have showcased the R3 concept on Tuesday. It will be one of the smallest MUVs in India and first car fully developed by Maruti. This new segment will help us garner volumes and maintain our market share.

With fuel efficiency playing pivotal role in success of cars, what kind of engines are being developed?

We have successfully launched our KB series engines which will eventually get into all our cars. I have been pursuing engineers to develop a diesel engine for the SX4, but no timeframe can be specified as of now. New diesel engines are also being developed by Suzuki in Japan, which are also expected to help Maruti to consolidate market share in India. Currently the 1300cc diesel engine being made under licence from Italy’s Fiat will cater to our needs.

Will the new arrangement with Volkswagen help Suzuki develop new engines?

There are a lot of possibilities, but we have to consider existing arrangements first. It is difficult to comment anything specific on this right now. But we shall discuss the options suitable for both the companies. Europe is our largest export market and Volkswagen’s strength in Europe will be of great help.
source : indiatimes.com

Interview with Mayank Pareek, Executive Officer, Marketing and Sales, Maruti Suzuki Ltd

admin — Fri, 18 Dec 2009 06:10:11 +0000

The country’s largest car maker Maruti Suzuki India has reported sales of 85,415 units in October – a jump of 32.45% compared to the same period last year. Domestic sales were up 21% to 7,155.

Here is a verbatim transcript of the exclusive interview with Mayank Pareek on CNBC-TV18 and the hindubusinessline

Q:In an interview with CNBC-TV18, Mayank Pareek, Executive Officer – Marketing & Sales, Maruti Suzuki gave an overview of the sales and growth numbers for this month.

Pareek: October was a festival month. So, domestic market has grown by 32%, export by 158% and overall we have got a 23% growth. However, we should be cautious in interpreting these numbers because this growth of 32% in October is coming on a very low base of last year. The right thing would be to see the growth over two years. If you see over two years the growth is around 12%.
So, there is an annualized 6% growth in the domestic market.

This growth started actually since January last year when the stimulus package from the government had come. That is one prime driver for this current growth.

Q: Also there were a lot of festive offers, like you have said earlier festive growth also saw a surge in sales. What is the status on that? Have you withdrawn the festive offers, how is it panning out going ahead?

A: Festival offers are over with the festivals. Yes on a serious note the offers on the vehicles have come down. If you see on average a 20% reduction will be there over the festive period. They have come down.

Q: Going ahead now that A2, A3 segments have been really your front runners where would this stress really lie for the company. What are the segments will we see the company going aggressively into?

A: Our company’s philosophy is to be a leader in every segment which we work. So if you see in A1, A2, and A3, in all segments where we are present we are market leaders. Our second principle is to have a multi-brand strategy in each segment to sustain that leadership. Instead of depending only on one product we depend on more than that product. Going forward, I do not see any reason for change in that principle. We will continue to strive for leadership in every segment.

Q:Maruti Suzuki has always tried to lure customers with multiple options in one segment. How well has this strategy worked in your favour?

A:Strategically, as Indian consumers are evolving it is no longer enough to offer just one plain vanilla product. We have to give them multiple options and this is a strategy we have been following for the last seven-eight years. Each segment has multiple products and each product has multiple variants, at every price point and every choice. For example, in the A2 segment which is the largest in India, we have six cars, three in the tall boy (Estilo, Wagon R and Ritz) and three in the regular hatchback segment (A-Star, Swift and Alto). First, what we consider is that the brand is top-of-mind for the customer. Next, we see if there are enough options. With our demography favouring the young population, people look for a motoring solution. A car is just not a thing to travel in from Thane to Panwel. It is an identity and niches and sub-niches will keep emerging. That is how we launched the Swift and A-Star. Any customer who walks into the show room should go back buying a car. That is our mantra and that is why today we are the market leaders in the compact cars segment.

Q:With the introduction of Tata’s Nano, will you be focusing more on strengthening your presence in the cheaper cars segment?

A:In the Alto we have three variants ranging in price from Rs 2.3 lakh to Rs 3.2 lakh. If you look at the numbers, the low-end versions don’t sell much. The cheapest car need not be the bestseller. Take the case of the Nano. The standard variant was not the top-selling model. People today value some standard features such as air-conditioning. For most people who drive cars, it’s okay if their houses don’t have air-conditioners, but their cars should. Similarly, people love power steering. So it may be good to focus on the lower end, but people will eventually move to high-end cars.

Q:How well would the Suzuki Kizhashi, a premium brand, gel with Maruti’s current market image?

A:Our philosophy is leadership in all segments. So when we introduce the Kizhashi in India we will look at leadership and we will come in at a time when we see a substantial demand for it.

Q:Two years ago Maruti Suzuki was not a big brand in the rural markets. Things are different today. How did you expand into the rural markets?

A:The rural market was something that gave us a hedge against the so-called slowdown last year. Around July last year we realised something was going wrong. So when we introspected, we understood the rural markets better. We had to create a need in the villages, then enable them to buy the car and then remove the mental block about how servicing the car was difficult. Programmes such as the Golden Quadrilateral that have been undertaken over the past few years have connected the villages to the mainstream cities. The next step was to identify the people who could afford to buy the cars. Rural does not mean poor and only farmers.

So to sell to them, we went to their environment and that’s how we established a rapport. To segment the markets, we focused on the opinion makers like the panchayat members. Last year, we conducted around 300 Gramin Mahotsavs, where we went to the villages and delivered vehicles to them. The effect was reflected in our sales numbers. In 2007-08, 3-4 per cent of the total sales came from rural centres. In 2008-09, it went up to 9.5 per cent. Now, it accounts for around 13 per cent of total sales.

Q:Is a bad monsoon going to be a cause for concern for the company?

A:Only 17-18 per cent of India’s GDP is now dependent on the rural economy. During the last four years, India has had copious monsoons. Just as one swallow does not make a summer, one bad monsoon will not dry up the rural wealth. Moreover, the Government, in anticipation, is pumping in money though projects such as NREGA. So far, these measures have acted as a hedge against deficit monsoons. The harvesting season in November will be something to take note of. But if a similar thing had happened 10 years ago, I wouldn’t be saying this as we were completely dependent on agriculture then.

Q:How do you see the festive season demand pan out for Maruti?

A:We’ve had healthy double digit growth so far. The upsides are the steady momentum in sales and positive market sentiment, which is an important factor in the business. Last year, when sales dipped, it was not that the fundamentals of the economy changed. The sentiment was negative. Other positive factors are that GDP has more or less settled at 6-6.5 per cent and inflation is low. The possible downsides could be the monsoons and the availability of finance. For now, there is adequate finance available. I hope this continues. So on the whole, the upside is more than the downside, while six months ago the downsides were more than the upsides.

Q:With infrastructural facilities improving, do you see the risk of people migrating from compact cars to sedans and luxury cars?

A:The world over, people are hanging on to small cars as awareness about environment friendly cars increases. Infrastructural constraints such as parking may not be solved too quickly in the near future. Plus, a first-time car buyer has and will continue to prefer a small car before experimenting with a big one. With projections stating that compacts will be substantial volume drivers till about 2015, the shift from small to big cars will happen very gradually.

All the foreign players who have come into India first rolled out their sedan versions, thinking that these cars were going to sell in large numbers. Now, these companies are chasing the small cars segment due to its growing popularity. Even China is turning towards small cars. India will be the manufacturing-, consuming- and exporting hub for small cars.

source: thehindubusinessline and CNBC-TV18.
admin: the Suzuki SX4 hatch not aviable in India