The Hindu Business Line : ‘Maruti is ready to play a much bigger role in Suzuki’s global operations’

New Delhi, Dec. 20 Mr Shinzo Nakanishi will be the new face of Maruti Suzuki India Ltd (MSIL) as he takes over as the Managing Director from his predecessor Mr Jagdish Khattar.

In his three-decades-long tenure at Suzuki Motor Corporation, Mr Nakanishi has worked in countries such as China, Indonesia, Hungary and Pakistan after which he has taken charge of the Indian operations.

Having served as the Non-Executive Chairman of Maruti since 2002, Mr Nakanishi took over as the Managing Director on November 19. Excerpts from an email interview with Business Line

Maruti Suzuki has maintained a strong market share with its diversified product portfolio in the compact car segment. But, now with increased competition, how do you see the Indian market dynamics changing?

Maruti Suzuki is leading in terms of sales growth and market share, and also in customer satisfaction. I believe, first, that we will stay focused on achieving one million units sales by 2010. This will require capacity expansion and upgradation of manufacturing facilities, for which we have already announced an investment of Rs 9,000 crore. The expansion of our sales and service network is underway for the one million target. Maruti Suzuki has also set ambitious targets for productivity, quality, safety and cost.

At the same time, I believe that Maruti Suzuki is ready to play a much bigger role in Suzuki’s global operations, and my task will be to make that happen. Maruti Suzuki’s manufacturing capability has reached a level where we want to make small cars exclusively in India for export to Europe. Of the three million cars that Suzuki wants to sell worldwide, almost 30 per cent have to come from Maruti Suzuki India. Maruti Suzuki has also started to share its good sales and service practices with other Suzuki companies worldwide, and I expect this flow to gain momentum in the next few years.

Do you envisage Maruti Suzuki holding on to its current market share in the next two to three years?What strategy would you adopt to maintain this especially as Maruti’s product portfolio is increasingly being integrated with Suzuki’s global range? Will this essentially mean that Maruti will not have new, India-specific, mass market compacts like the M800 and the Alto?

Suzuki Motor Corporation has chosen a strategy of “World Strategic Models” to drive long-term growth. As part of this strategy, we have been developing global models, which are European in overall styling and design, and carefully modified to suit local markets. Hence, Indian customers get international levels of quality and design, at the same time as customers in other key markets.

Swift, which was launched worldwide in 2005, was the first model to emerge out of this strategy. Since then, Suzuki has launched the Grand Vitara, SX4 and Splash as part of the World Strategic Model approach.

Suzuki is also expanding its image from a maker of mini cars and small cars, to a company that offers the full range of models.There is a conscious effort to introduce contemporary design, style and premiumness. Suzuki is also widening the range of models on offer. An indication of this was provided in the Frankfurt Motor Show and again in Tokyo where Suzuki displayed the Concept Kizashi.

Specifically for India, Splash and A-Star will be introduced as part of the World Strategic Model approach. We have launched five new models in the last two years and we have an aggressive plan for new model launches going forward as well.

You have announced an investment of $1.8 billion for research and development? What will be your R&D focused on — design, prototyping, testing?What would be the increase in your R&D headcount?

It is too early to comment on specifics. Maruti’s engineers have displayed competence in the Swift and also the Concept A-Star. The medium term vision is to make the R&D centre at Maruti Suzuki on par with that in Suzuki, Japan. R&D will be a critical area where Maruti Suzuki will play a much greater role in Suzuki’s global operations.

What is the kind of roadmap are you looking at for MSIL’s R&D?

Maruti Suzuki’s R&D has shown tremendous potential through its contribution to the Swift and Concept A-Star. The R&D at Maruti Suzuki will strengthen in the next three-five years, both in terms of infrastructure and capability. Further, we have lined up certain critical initiatives that will better the experience of our customers and partners.

Mr Osamu Suzuki had mentioned about increased investments in the sales network and warehousing. So have you finalised any port close to which your export warehouse will be located?

The stockyard is for spare parts andalso for finished vehicles. These are proposed to be put up in different parts of the country.

Currently the stocking is confined to Gurgaon and Manesar. The purpose of these stockyards would be to improve customer experience: parts and cars can reach customers faster in other parts of the country.

What kind of changes would you like to implement on the management front? With a massive rise in exports projected for MSIL will there be a separate division that will handle production and logistics of export models?

Maruti’s success so far has been on account of the contribution of our people, systems, technology, support of our partners and leadership provided by seniors like Mr Jagdish Khattar. I see no reason for any drastic change in management style. There are no plans at the moment for a separate division to handle logistics as you mention.

Will there be an integration of the marketing and/ or the administrative organisations of MSIL and other Suzuki subsidiaries in India like Suzuki Motorcycle India?

No such plans.

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