Driving the new Maruti Suzuki Ertiga, one number is sure to attract your attention—the average fuel-efficiency figure displayed on the speedometer screen. On the highways, it will hover around 19kpl, and in city traffic it’s unlikely to drop below 15-16kpl. And here I am talking about petrol, not the diesel which is generally more fuel-efficient.
Good fuel-efficiency is a function of many things—a car’s aerodynamic body, use of light-weight materials, driving habits—but in the new Ertiga it’s also due to a new petrol engine, called the K15 that gets the smart hybrid technology and a lithium-ion battery. “Even in the multi-utility vehicle (MUV) segment, the market is shifting to petrol,” says RS Kalsi, senior executive director, Marketing & Sales, Maruti Suzuki India, “and to ensure low running costs for customers, companies have to innovate.”
Innovation also has to happen in the area of growth. Kalsi, who has been instrumental in piloting change initiatives at Maruti, has displayed an inclination towards innovation, including spearheading Maruti Insurance, Maruti Finance, True Value, Maruti Driving Schools and network development. In fact, the Nexa sales channel—which has changed the way Indians buy cars—was developed under his guidance. In an interview with FE’s Vikram Chaudhary, he shares his thoughts on the current and future trends of the Indian passenger vehicle market
On the current slowdown
The Indian passenger vehicle market is going through a slowdown. Fluctuating exchange rates, rising fuel costs and high interest rates have impacted consumer sentiment, and festive season sales this year were poor. In addition, markets such as Delhi NCR saw flat car sales growth last year. Kalsi, however, doesn’t see it as a cause for concern and calls it a short-term phenomenon. “Car penetration is still very low in India (about 22 cars per 1,000 people), so it will definitely increase. While a car is a mobility solution, it is also an ‘aspiration’. In India, a car is not just another product; it’s a status symbol, it’s something people look forward to. These phenomena will keep driving car sales in India. That’s why it’s not a cause for worry. Moreover, city limits are expanding, and so will car sales,” he says.
On the rise of shared mobility and ride-hailing services, he says that while these are playing a major role in meeting the mobility needs of Indians, “these won’t replace the need for a personal car.”
On why there’s no CNG in the Ertiga
He says that the company will go step by step. “We’ve launched the Ertiga in petrol and diesel, and there’s more in the pipeline. I cannot, however, put a timeline to future projects, but it (CNG) is in the consideration set. Already, we have eight models equipped with CNG fuel. We have to take a call on future products, and this will also depend on how fast the government expands the CNG infrastructure and the availability of fuel across the country,” he says.
On future fuels and powertrains
CNG is supposed to be a much cleaner fuel than petrol or diesel, and so it’s a practical option for the future. It’s also better than other fuels as far as cost-effectiveness from a customer’s point of view is concerned. Kalsi says the customer must have more choice in powertrain and fuels. “Going forward, I think India will have a mix of electric/hybrid vehicles, ethanol-powered vehicles, CNG and more. The possibilities are endless. At this year’s Paris Motor Show, a student team from a German university showcased a solar car, with panels fitted on its body. Commercial viabilities of such projects haven’t been seriously studied by anyone, but these look promising,” he adds.
On the market shifting to petrol
He says the shift is across segments and across territories. The reason, obviously, is that the price difference between diesel fuel and petrol is narrowing, and customers react differently to the same. “There are some customers who traditionally prefer diesel, irrespective of cost considerations. Then there are others who calculate buying and running costs over the lifetime of a vehicle, and might consider petrol depending on their driving habits. There are also fence-sitters who are influenced by policy decisions, like the NGT talked about phasing out diesel vehicles that are over 10-years-old,” he says. On different car segments, he adds, “In an MUV such as the Ertiga, the diesel-petrol split is 50:50; in sedans, we’re seeing the segment moving to, say, 20% diesel and 80% petrol.”
On new-age customers
There is no doubt that younger generation is driving consumerism in India, and their proportion is increasing. They are also aspirational, and want things ‘now’. Kalsi says car companies have to target them. “That’s why you see the new Ertiga is designed in a way that reflects youthfulness and style. We have to develop products for them.”
The company, earlier, developed a car exclusively for such new-age customers—the hatchback Ignis. But it hasn’t been as successful as other company cars. Kalsi, however, doesn’t term it a failure, and says that every model Maruti introduces cannot touch the sales benchmarks set by other models in its portfolio. “Cars such as the Ignis belong to a niche category. For such cars to sustainably sell over 3,000 units every month itself is a mark of success.” He adds it might be a case that younger customers skipped the hatchback segment altogether. “With easy availability of finance, many of the younger customers who would have otherwise considered hatchback cars are now buying sedans and SUVs as their first car.”
On the future of cars sales
The current sales slowdown is a short-term phenomenon, he says. “It’s sentiment-governed—interest rates have tightened and fuel prices have gone up. Once fuel prices start to come down and interest rates get favourable, car sales will rise. Moreover, GDP growth has been consistent, monsoon was on track, the government has increased MSP of certain agricultural crops and this will give more money in the hands of farmers and in the connected value chain … all these factors point towards a positive future,” he notes.