Maruti Suzuki India entered the passenger car market four decades ago with the Maruti 800, an ambitious vehicle milestone. Born out of a joint venture between Suzuki Motor Corporation and the Government of India, this partnership has continued and evolved.
Maruti Suzuki India entered the passenger car market four decades ago with the Maruti 800, an ambitious vehicle milestone. Born out of a joint venture between Suzuki Motor Corporation and the Government of India, this partnership has continued and evolved.
Maruti’s share in the passenger car segment has come down from over 90% initially, but it still occupies about 43% of the market. Still, India’s demographics are changing, with a noticeable shift in design and product preferences towards a younger demographic, creating challenges.
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Maruti’s share in the passenger car segment has come down from over 90% initially, but it still occupies about 43% of the market. Still, India’s demographics are changing, with a noticeable shift in design and product preferences towards a younger demographic, creating challenges.
Suzuki Motors has positioned India as its fastest growing market in 2022-2023. Japanese companies expected sales to increase in their Indian operations, forecasting 5-7% year-on-year growth in the Indian market.
Maruti Suzuki’s share of Suzuki’s global sales rose from 50.4% in FY2022 to 54.8% in the following year. Additionally, Suzuki’s share in the world’s total automobile production increased from 58.8% in the previous year to approximately 60%. Suzuki is keen to grow its India operations, recognizing its important role in shaping its global brand reputation.
For Maruti, an Indian listed company, the imperative is to strategically regain market share through launches in the rapidly expanding sports utility vehicle and electric vehicle segments. The question that remains is whether this ambitious plan can be successfully implemented.
This reveals why Suzuki is comfortable retaining key talent, both executives and non-executives, without making any management changes. A clear example is RC Bhargava, Chairman of the Board of Directors of India. He has held the position since 2007 and has been a member of the Board of Directors since 2003.
Long tenures, especially for companies of this size, raise governance questions regarding independent director turnover. There is also speculation as to whether such a status quo would be consistent with Suzuki’s strategic needs, given that the chairman is approaching 90 years of age.
It is surprising that despite significant public equity holdings of 45%, there has been no oversight, and there are obvious issues such as concerns about diversity in board composition and the average age of board members. No questions have been raised.
Maruti seems to have ignored the important aspect of developing proactive and cutting-edge human resources. Industry observers say Maruti’s organizational ethos resembles that of a public sector organization and falls short of reflecting the accountability standards of a listed company.
Also, with the entry of emerging automakers like JSW and Ola Electric, Maruti faces the potential risk of losing valuable talent to these new entrants and other established auto giants in the industry.
Despite having a design center in India, why isn’t Maruti initiating new designs and product lines? It is interesting to note that other Indian and foreign car manufacturers have not incorporated the ‘Design for India’ imperative. While the company emphasizes the concept of “Made in India for the world”, Maruti appears to be leaning towards focusing on instructions from its parent company in Japan.
Mahindra and Mahindra Ltd’s strategic investments in global design centres, represented by Mahindra Advanced Design Europe (MADE) in the UK, played a key role in the brand transformation. The move comes as part of the Mahindra Global Design Network, which has studios in Mumbai and Italy, and has helped transform the brand from a tractor-centric image to a premium option. This is evident in the market recognition and premium status of Mahindra’s Scorpio, Thar and other vehicles.
The suspicions stem from delays in Maruti’s utility vehicle lineup and challenges in aligning the company’s electric vehicle products with market adoption trends. According to the design preferences of young car owners, Maruti’s determination and ability to inject fresh perspectives into its sales network will come under close scrutiny. Analysts believe that Maruti is strategically positioned to benefit from increased market share and higher average selling prices from the new UV portfolio, if things go well.
Aiming to establish itself as a global auto major with Indian origins, Maruti needs to contemplate a rethink of its strategy, a transformation that Mahindra, Tata and Hero have successfully made.
For those who are familiar with the Ramayana, Maruti (the famous character Hanuman) was entrusted by Lord Ram with the mission of procuring medicinal herbs from Mount Sanjeevani. In today’s Indian auto sector, it looks like Maruti may need a metaphorical Sanjeevani to rejuvenate itself.