More than three decades ago, Suzuki Motor Corp went beyond its affluent home and made a beachhead in a country that had one of the lowest levels of automobile ownership in the entire world. Now, the Japanese leader in compact cars owes its crown, largely, to that early association with India, where one in two cars sold locally are made by the company’s home-grown unit.
India has doubled its share of the production volumes for Suzuki Motor Corp in the past one decade, with Maruti Suzuki increasing its contribution to 54.2% in 2018 from 27-28% at the end of 2008, and 52% at the end of 2017. India accounted for about 34% of the consolidated revenues of Suzuki Motor in FY18.
RC Bhargava, chairman, Maruti Suzuki, said the Indian market would continue to grow and so would the share of Maruti in Suzuki’s global operations.
“The possibility of Suzuki growing without India is low, because all the other markets where they are, they are not as large markets as India is, and Japan does not have growth now,” Bhargava said. “The other markets will grow but in smaller numbers. The market share of India will continue to grow.”
In the past 10 years, while Suzuki Motor Corporation saw its total volumes increase from 2.62 million to 3.43 million, the home base saw its production slide to 1.01 million from 1.21million. By contrast, India saw its production increase two and half times from 7,50,000 at the end of 2008 to 1.86 million at the end of 2018.
Given the high stakes for Suzuki Motor in India, the company is ramping up its capacity to maintain its current market share. Suzuki set up a new plant in Gujarat and plans to add new capacity of 15 lakh units a year in phases over the next couple of years. Bhargava said Maruti will have to continue to work on competitive products to hold on to its share.
Gaurav Vangaal, country lead, light vehicle forecasting at IHS Markit, said the focus on India is expected to continue, bringing investments in plants, products, technologies and network. He expects Maruti to contribute 64% of Suzuki’s global production by 2023.
India is key to Suzuki’s survival globally. “From Japan to China, Suzuki is facing intense competition. The ageing population and shrinking birth rates have caused the overall markets there to stagnate,” Vangaal said. “Emerging markets such as Brazil or Thailand are not helping Suzuki Japan much. The fundamental growth factor of India and Maruti’s dominance is a big positive for Suzuki.”