Maruti Suzuki says it aims to increase its production to 20 lakh units in the ongoing fiscal year, thanks to greater availability of semiconductors. In his address to the company shareholders in the Maruti's annual report for FY2022, chairman RC Bhargava said that the upcoming Grand Vitara midsize SUV will be a key driver in the company’s aim to touch 2 million units.

The carmaker has recorded higher production in the first three months of FY2023 – it produced a total of 4,54,161 units, registering a 26 percent growth compared to the first quarter of FY2022. Given the rising demand for many of its models, it is likely that Maruti Suzuki will meet the 20 lakh units target by the end of March 2023. 

Chip availability to increase production

Commenting on the outlook for FY2023, Bhargava was positive that vehicle production will swell because of the improving availability of semiconductors. He cited the upcoming launch of the Creta-rivalling Grand Vitara midsize SUV – to be manufactured at Toyota’s factory in Karnataka along with the Urban Cruiser Hyryder – as one of the reasons for the increase. 

Updating Maruti’s SUV portfolio is necessary to make up the decline in sales of entry-level hatchbacks, which has been the core segment for the company. Sales of Maruti Suzuki’s budget hatchbacks declined by 5 percent in FY2022 compared to FY2021, due to rising costs. 

Earlier, the carmaker did not have enough models in the rapidly growing SUV segment. However, Bhargava said the situation has greatly improved with the launch of the new Brezza and the upcoming Grand Vitara. He also added that more SUVs from the brand are to follow. 

Maruti Suzuki invests Rs 11,000 crore in its new plant 

To meet future demands, Bhargava said Maruti Suzuki has finalised land purchase at Kharkhoda, Haryana for its new manufacturing plant, where it is investing Rs 11,000 crore for the first phase. "The first unit is planned to be commissioned in 2025 and the second about a year later," he added. Depending on market conditions, Bhargava said that the plant has the potential to become “one of the largest car manufacturing sites anywhere in the world.” 

Commenting on the Maruti's electrification plans, the chairman said it will start producing EVs at Suzuki’s Gujarat plant from FY2025, reiterating that it will take time for EVs to penetrate in all segments of the car market. Until then, the carmaker will be looking at the use of CNG, ethanol, biogas and strong hybrids to reduce its carbon footprint.