Maruti Suzuki India bets big on hybrid, optimistic about new models driving growth

Maruti Suzuki Grand Vitara, which was recently unveiled and is expected to launch in the coming months, is the company’s new play in the SUV segment, an area where it aims to regain lost grounds.

Maruti Suzuki India bets big on hybrid, optimistic about new models driving growth

In some of the key trends seen across the passenger vehicles market, retail sales have been lagging wholesale numbers. This is primarily because OEM production has not been able to match actual requirement. Maruti Suzuki India sees it as a challenge for the OEMs, “One big challenge for the upcoming festive season for OEMs is how to manage 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 vehicle retail industry is on a robust growth path. In fact, in the first four months (Apr-July) of FY2023, the passenger vehicle wholesales came at 12,04,296 units, which could easily be amongst one of the best-performance for the segment despite the multiple challenges/disruptions faced by the industry.

In fact, one of the key growth drivers for the personal mobility segment has been the launch of new models especially in the SUV segment, which has led the surge in PVs. At present, the first four months of wholesales indicate that SUV now contributed 49.95% of the total passenger vehicle sales, while passenger cars make up for 46.08% of the sales. The remaining comes from the van segment.

This is where Maruti Suzuki India is now gearing up 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 play in the SUV segment, an area where it aims to regain lost grounds. Responding to a query on reviving the Grand Vitara name, Srivastava said, “We thought through many names for 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 globally with the DNA of SUV. Secondly, from the Suzuki family, Grand Vitara has been a very successful product. And that is that is one reason why we chose the Grand Vitara name.”

It was in 2009 that Maruti Suzuki India first brought the Grand Vitara to the country, which was its first and only full-size SUV to be sold in its portfolio. But it failed to make a mark due to the high price tag (around Rs 25 lakh) because it was brought under CBU (completely built unit) route thus attracting higher import duty, and secondly having low fuel economy, an area where Maruti Suzuki products differentiate themselves.

Betting big on hybridsation
According to Maruti Suzuki India, while the global legislation, environmental concerns and tighter emissions norms will make electrification a ground reality, the specific timeline might still be uncertain.

“The general analysis based on cost acquisition looking at the current cell technology available, price per kWh, driving range and charging infrastructure the penetration of EVs in overall PV sales will be anywhere between 10% to 15% by 2030,” Srivastava pointed out.

Srivastava explained that over the next 10 years, about 38 – 40 million new cars are expected to be sold and of this 1 or 2 million will be EVs. The question then is what can be done with the balance vehicles while balancing environmental concerns-

“The RDE norms kick in next year. You will find an increase in vehicle prices. At present, EVs are about 50 to 60% more expensive than their petrol counterparts. While hybrids are also expensive but are still cheaper than EVs. Secondly, they don’t need to be charged for hours. Thirdly, especially in the case of strong hybrids, you don’t have to pay for charging. Lastly, the performance is great because you know in a typical urban drive cycle roughly around 40-60% of the time the vehicle will operate on battery in that sense, it’s like a mini-EV,” added Srivastava

According to Srivastava, this is a win-win proposition on the performance front too. It starts off with the high torque of he EV mode, which is very silent. In fact, when extra power is required, for example in overtaking, you have gasoline and the battery both powering the wheels. “It’s a great mix and if we are able to convey this to the consumer about it I am sure people will take note of it and they would go for the strong hybrid till the time that the adoption of EV’s become mainstream,” Srivastava highlighted.

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

The Union Minister for Road Transport & Highways, Nitin Gadkari, recently called for making 6-airbags mandatory in all passenger vehicles. While the intent behind the scheme is good, it also creates an engineering challenge for existing vehicle platforms to be upgraded to be able to accommodate 6 airbags without compromising the vehicle integrity. When asked about Maruti Suzuki India’s perspective, Srivastava said, “Safety is very important and it’s a concern not just for government, consumers, OEMs but also for us at Maruti Suzuki. It is a top priority as far as our vehicle design is concerned . There are 6 airbags in many of our models, but in the lower end, the price sensitivity is a little higher for the consumers and therefore you may see the affordability factor going down. The increase in prices of entry level vehicles is not just so much about the airbag along but overall factors. Not just because of some of the regulatory changes, but also the transition from BS4 to BS6, commodity prices going up.” He signed off highlight the importance of affordability when it comes to demand in the entry level and that is something we need to watch out for.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.