Maruti’s LCV to target Tata Ace and Ashok Leyland Dost

While Maruti Suzuki India’s proposed light commercial vehicle Carry is slated for an early 2015 rollout, the country’s leading carmaker does not plan to use the LCV platform as a springboard to enter the commercial vehicle (CV) market in a big way but remain only in light CVs. This was disclosed by chairman RC Bhargava at the carmaker’s Annual General Meeting at Delhi today in response to a shareholder’s query of possible opportunities for Maruti Suzuki in the CV market.

The LCV Carry, which goes into production by the year end, will be powered by a turbocharged 800cc diesel engine and will also offer a CNG option. To be produced at the Gurgaon facility, the carmaker is planning an annual production capacity of 80,000 units for the vehicle.

“We are entering the 1-tonne LCV market and will therefore be competing with the Tata Ace and the Ashok Leyland Dost but for producing higher level of CVs, our technology which is for cars is not suitable for heavier CVs. We do not have the technology for HCVs and even Suzuki Japan does not make HCVs. We have enough opportunities for growth in the passenger car market and therefore if we try and diversify in the CV market we can lose the kind of focus that we require in the passenger car sector where our expertise is. There is a lot of scope to grow in this segment and we should not divert and weaken ourselves in both areas,” said Bhargava. 

The company’s R&D vision is to design and develop automobiles for the India, Middle East and the African markets on its own. Maruti Suzuki exported 101,352 units during 2013-14 with the contribution of non-European markets being 71 percent with the new Swift and Dzire models being the frontrunners. Shipments to Mozambique were around 16 units and an additional order was received for another 30 units. The export plan for the future entails a huge focus on Africa in terms of introduction of new models with one of the initiatives planned being implementation of dealer management system. Three new models will be added to the export kitty to strengthen its roots in the export markets.

Commenting on the recent dip in petrol prices, Bhargava is of the opinion that the new government has finally got a stable policy in place. A fall in crude prices internationally has brought both petrol and diesel prices to a level where no more subsidy is involved and the difference in prices between the two now hovers around Rs 10. “We have been keeping close track of the market trends and the results show that the share of diesel cars overall has declined from 62 percent to 50 percent or so and our expectation is that there may be a slight further decline and then the two fuel cars will stabilise in the market. We will ensure that we take advantage of the situation and will be introducing vehicles with both fuels and CNG to give customers the maximum choice so that they can manage to buy what is best suited for their requirements.”

The company has clearly indicated in its annual report that it will enter new segments like SUVs and MUVs while leveraging opportunities in the LCV space.