To enter new market segments; advance new Manesar plant start.
New Delhi, Dec. 22
The market share of Maruti Suzuki India Ltd (MSIL) is expected to further dip next year due to capacity constraints at its facilities in Gurgaon and Manesar; its new production line is only expected to start by the end of next year.
"Though we are the biggest carmaker here, we are not addressing around 15 per cent of the market. How to attack this is a challenge. We expect to maintain a 50 per cent market share - but if the market suddenly expands to, say, 7 million units a year from the current 2 million units a year, I cannot do anything. The market will grow as affordability increases," the company Managing Director and CEO, Mr Shinzo Nakanishi, told newspersons.
For calendar 2010, it is targeting 31 per cent higher sales compared to the previous year.
The car market leader is working on a multi-fold strategy to garner at least half of the domestic car market, although buyers face an up to six-month-long waiting period for some models such as the Swift and Swift Dzire.
The market has also seen the entry of new players which too has dented Maruti's market share - from 47 per cent in 2008-09, Maruti's slice of the pie narrowed to 45 per cent in the first eight months of this fiscal. The domestic car market is slated to grow at around 20-25 per cent this fiscal.
Over the next four years, the predominantly small-car maker is looking at new segments for growth, such as larger sedans, utility vehicles (UVs) and small SUVs.
The company is set to launch its most expensive product yet - the Kizashi sedan (in the Rs 15-20 lakh range) in January next year, followed possibly by the RIII UV in 2011. It is also considering the launch of the small SUV Jimny.
To capture a greater share of the market, the company is also trying to advance the start of two greenfield production lines at Manesar. Currently, there is only one production line at Manesar and three at Gurgaon.
"We are aiming to produce 1.85 million units by end-2012. Of these, over one million cars will be produced at Manesar when all three production lines become operational, which should happen by the start of 2012," said Mr Nakanishi.
Moreover, by investing Rs 60 crore on higher efficiencies and innovative manufacturing practices, it aims to make 12 lakh units this fiscal on the existing four production lines, though the annual installed capacity is only 9.43 lakh units. Besides, it would also leverage its strength in the rural markets and its extensive dealer/service network to continue its strong grip on the market.
While the company expects December car sales to drop over the previous month (1.12 lakh units), it still expects it to be above 1 lakh units. For calendar 2010, it is targeting 31 per cent higher sales compared to the previous year.
A company official said the Manesar and Gurgaon plants would be shut down for routine maintenance next week, resulting in lower production of 33,000 units. It makes 4,700 cars everyday.
Admitting that the lack of diesel engine options was a weakness for MSIL, Mr Nakanishi said a higher power 1.3 litre Fiat-sourced power plant would be assembled by the Suzuki's powertrain division in India starting January. This would be used in the diesel SX4.
MSIL shares at the BSE dropped 2.11 per cent on Wednesday to Rs 1,398.75.
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