Maruti expected to launch 10 new models in next 8 years: Bhargava

Maruti Suzuki India (MSIL) could have about 28 different models, including six electric vehicles (EVs), in its portfolio by 2030-31 (FY31), its Chairman R C Bhargava said in the company's annual report.

Currently, India's largest carmaker sells 18 different models. He said that the Indian car industry is expected to grow at a six per cent annual growth rate till FY31. 

Bhargava noted that the company is starting its third phase of growth called Maruti 3.0. "The challenges before the company are unprecedented. It took us 40 years to create a capacity of 2 million units and SMC (Suzuki Motor Corporation) helped in this process by establishing the Gujarat facility. Your company now has to add the next 2 million in a period of 9 years," Bhargava stated in the annual report released on Saturday evening.

The task of managing all the issues relating to the production of 4 million units a year requires considerable thought and possible reorganisation of the structure of the company keeping in view the best interests of all shareholders as well as other stakeholders of the company, he noted. "We will, as soon as possible, announce what we are proposing," he added.

One such step towards reorganisation was taken earlier this week when MSIL announced that it would acquire the Gujarat plant from SMC to enhance its production efficiency. Maruti expects to complete the transaction by March 31, 2024. 

The plant in Hansalpur, Gujarat, was run by Suzuki Motor Gujarat Private Limited (SMG), which is SMC's subsidiary. SMG has been manufacturing cars such as Baleno, Swift, Dzire and Fronx for Maruti under a contract manufacturing agreement that was signed in 2015. SMC owns about 57 per cent stake in MSIL. 

The consolidated net profit of MSIL more than doubled year-on-year (y-o-y) to Rs 8,211 crore in FY23. "By FY31, your company (MSIL) could have about 28 different models. Clearly the organisation and systems for selling such a large variety of cars will require changes from what exists at present," Bhargava noted. 

He said that investments needed to double the manufacturing capacity by FY31 will all be done from the "internal resources". 

While MSIL does not expect the Indian car industry to grow in double digits, like what happened in China in the past, it does expect that a six per cent growth rate will be maintained till FY31, he noted. In FY24, MSIL's growth rate is expected to be slightly higher than six per cent.

"Along with the rising domestic demand, the prospects for exports are also expected to continue to improve. Our exports rose to 259,000 units last year. We expect the demand for exports to continue to grow and export volumes are projected at 750,000-800,000 cars by FY31," he mentioned. 

MSIL does not have any EV in its portfolio right now. "The development of EVs is proceeding well at the Gujarat facility. Your company expects to start the sale of the first model in 2024-25. By 2030-31 we expect to have six EV models. These models are expected to comprise 15-20 per cent of our total sales by that time," he mentioned. SMC had earlier this year stated that MSIL will launch six EVs by FY31.