Failure to keep up with tech to hurt car makers: RC Bhargava, Maruti Chief

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MUMBAI:RC Bhargava, the chief of India’s top-selling carmaker Maruti SuzukiBSE -1.68 %, has said the company will reap enormous benefits from its Japanese parent Suzuki Motor Corp’s partnership with Toyota Motor Corp, the blueprint of which is likely to be finalised soon.

Toyota Motor and Suzuki Motor are moving towards a business partnership that will enable the two to explore cooperation in areas including environment and safety, IT and mutual supply of products and components. In a note to shareholders in the company’s FY17 annual report, the Maruti SuzukiBSE -1.68 % chairman stressed that new “technologies are going to be enormously important” in the years to come and failure to keep up with change could have “severe consequences” for any company.

“In India, we have to deal with issues of energy security, environmental protection and safety. The aspirations of the young, technologically savvy customers have to be met. Fortunately, our parent is fully aware of these needs,” Bhargava said in his note.

Alluding to the government’s plan to promote use of electric vehicles, Bhargava said such policies would enhance the country’s energy security and, over time, lead to a cleaner environment. Maruti Suzuki will not hold back on introducing EVs if people are ready to buy them, he said.”Meanwhile, efforts must continue to be made to enhance fuel efficiency.

Hybrid technology is already resulting in significant improvements in fuel efficiency and is acceptable to customers,” Bhargava said. “We will continue to promote such vehicles as a step towards electric mobility.” He said the lithiumion battery pack plant being established by Suzuki in a joint venture with Toshiba and DensoBSE 0.32 % will help reduce costs and promote hybrids and EVs.

Bhargava said the ‘Yaruki’ spirit or “Will to do it” attitude would enable the company to reach its goal of selling 2 million cars by 2020, and then to achieve even higher sales. With the parent company taking responsibility to increase production, Maruti Suzuki is focussing on expanding its sales, service and spare-part outlets.

Maruti Suzuki has been an outperformer in a market that has been choppy for the past few years. If it were not for its double-digit growth, the overall passenger vehicle market in the country would have shown a lag. Experts say the pace at which the company is growing, it is likely to meet its 2-million-unit target earlier than expected. Bhargava said the acquisition of land for establishing outlets was progressing well and this year 400-500 sites would be bought for leasing to potential dealers.

He said the success of the NEXA channel had not only brought in a new class of customers but also helped Maruti Suzuki change its image as a maker of small cars to the one that can offer good upgrades in the mid-size segment. “The lessons from NEXA will now be used to upgrade the other channels,” he said. The company has already revamped the existing Maruti Suzuki outlets with a new customer interface, and on Thursday, it also announced the revamping of the used-car channel, TrueValue.

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