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Tuesday, February 9, 2016

'We are working towards launching 15 models by 2020,' Kenichi Ayukawa, MD & CEO, Maruti Suzuki India Ltd

Kenichi Ayukawa, MD & CEO, Maruti Suzuki India Ltd (MSIL) shares his views on the company, industry and challenges ahead. Edited excerpts...

We are seeing quite a few products from India now. What in your view will be the role of R&D going forward?
Our research and development (R&D) centre was set up in order to develop products while also be close to the market and have faster product development cycles. We've got a testing track as well at the new R&D centre at Rohtak, which now leads to a lot of savings on time. That is why Rohtak will contribute to product development in India. We are one team. There will be lot of collaborative R&D between Suzuki and Maruti. Together we will strengthen our presence in the Mini, compact and sedan segment and SUV segment.

Suzuki has outlined 20 models in 5 years under Suzuki NEXT100 plan. How many of these will be developed in India?

Out of the 20 models planned, 15 will come to India. Already our engineers are doing some work. Brezza has been created in India and CV Raman is the chief engineer for the product. Development cycle is 4-5 years long usually. We are currently sending 50-100 engineers to Japan to study with the team there, to train and learn. While total responsibility is difficult, we are developing capabilities of people and working towards having more Indian inputs into product development. I expect them to develop at least 2-3 models in future.

Suzuki has outlined 2.2 million units from Asia by fiscal 2019. Comment. Hopefully 2 million of this will be from India, this is if the industry size will be 4.8-4.9 million.
There is a shift in the Indian car market. What is the impact for Maruti Suzuki?

We will continue to meet customer requirements. Our main product has been the 800 cc model, and we are now moving to 1000 cc, 1.2 litre, 1.3 litre, engine sizes. Cars are getting bigger, engines are getting bigger. Customer demand is also changing – customers are directly buying the Swift as their first car. We are at approximately 45% market share and we are working towards the remaining 55% customers that are not buying Maruti Suzuki. That has been the reason behind Nexa, which will contribute 15-20% to the total volume. For this new channel, we need new products and new models, and we are working towards that with 15 models to be launched by 2020 we target to bring models in new segments. It is not size alone, we have to overall improve the product, make it more fuel efficient, low on emissions, enhance safety.

You have stated your product focus to be in the mini to C segment. Does this mean that you will stay away from D, E segments entirely?

Suzuki’s home-ground is the A, B, C segment products. The first point is whether we have fully covered that segment yet or not. If the customer is interested in D, then we need to think of how to satisfy him. Currently, there is limited demand in the D segment. As it gets bigger, we will see. Right now, we would like to focus on A, B and C segments, improve them in all aspects, fuel efficiency, features, safety etc.

Any apprehension that you may have run out of capacity in near future?

We are at 1.5 million in Haryana and we have some room in increasing productivity and capacity expansion. Regarding Gujarat, the plant will be completed by end-March. By 2017 spring, we can start production. Phase one will add 250,000 units annually. Overall, I think we can manage.
What's you take on the Diesel ban? Are you worried?

Yes we are worried. Pollution is severe, we have to understand and recognize that. Whether banning is a good solution or not, needs to be assessed. Banning does not help. In fact, old vehicles on roads pollute much more.

India is an automotive hub and the largest market for SMC. Will exports increase in the near future?

Yes India as a market is poised to grow and with the Gujarat plant, we will need more capacities. Our focus in our domestic market and we will have to increase product portfolio. We aim for 3 million capacity right now and more products are in the way. We are exporting too and markets such as Middle East and Africa are growing.

After main-streaming of the Auto Gear Shift technology, what is next?

We have to continue to develop AGS and after WagonR, Alto, Celerio and Dzire, we want to keep expanding the AGS in our other products too.

What is your take on implementation of BS VI norms by 2020?

The technology to implement and use BS VI exists but OEMs need lead time. India needs to still get rid of models that are running on BS I, BS II and BS III.

What's your outlook for the industry for 2016 and for Maruti?

We are looking forward to good products and have been preparing for a few years now. We have a good production capacity with a total of 1.5 million. Increasing demand can be met sales wise and via new channels. For the sector, the demand for products is improving gradually with new products for the customers being launched. Also good products will succeed and trend will continue and the total volume will increase. Industry has outlined growth of 10-12 %, MSIL will grow by double digit in FY 16-17.

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