Profitability in India a challenge says T Suzuki

Maruti’s dominance in the Indian market commanding 47 percent market share is the envy of the auto industry. Yet, unlike the big global automakers that enjoy good sales in key markets like the US, China and Europe, Suzuki has a very small global presence and its fortunes are strongly hinged on India. Is it a risk to be heavily dependent on a single market where margins are low? Speaking exclusively to Autocar India, Toshihiro Suzuki, President and COO, Suzuki Motor Corporation (SMC) says, “Having a big market share in India is the strength of Suzuki, and we want to continue to enhance our marketing and service capability in the country to make our brand stronger. No doubt, increasing profitability is a challenge in India, but ever since we built the first plant here in 1983, Maruti Suzuki has been growing along with the Indian auto industry”.

Suzuki is cautious about a full-fledged thrust into the premium or luxury-end of the car market, where margins are typically fatter and instead, will be focussing on its core competence at the lower end. “We would like to further strengthen our fundamentals and build on the foundations of what we had laid earlier. In order to get more Indian customers, we want to enhance our capabilities in products, sales and service. We want to further increase the value we provide and by doing so, we want to take it to a situation where we are able to get a premium and better profits, but yes, it’s a challenge”, says the Suzuki president.

Toshihiro Suzuki also feels that policies and regulations in the auto industry need to be stable, referring to the sudden ban on diesel cars above two-litre in Delhi. “Whenever regulations like this are being chalked out, it has to be done strategically. Policies have to shaped in a step-by-step way. In case of diesel, any abrupt decision will adversely impact the manufacturer, and it becomes difficult to comply with norms. This also causes inconvenience to customers and there’s a possibility it would adversely impact the nation as a whole”.

Suzuki says that despite the challenges, Maruti is on course to hold on to its market share and produce two million cars in India by 2020.