Maruti Suzuki Not Standing Still Atop India Market

MUMBAI – Steadily rolling out new products and staying tuned to customer desires have helped Maruti Suzuki cement its position as India’s leading automaker.

Industrywide light-vehicle sales for full-year 2014 declined 1.9%, according to WardsAuto data. Maruti deliveries, however, climbed 10.8% to 1,152,128 units, good for a 38.4% share of the Indian LV market.

“Maruti continues to retain the edge with new products,” Managing Director Kenichi Ayukawa says.

This year’s rollout of new vehicles will be the largest in Maruti’s 32-year history as a Suzuki subsidiary. They include the S-Cross CUV, Celerio diesel, Wagon R AMT, a premium hatchback codenamed YRA, Wagon R AMT and a mini-truck. Also planned are a facelifted 7-seater Ertiga MPV and Swift Dzire.

A separate sales network is planned for the mini-truck, a segment in which Maruti has little experience.

India’s 10 best-selling light vehicles are Maruti models, including the top four – the Alto, Swift Dzire, Swift and Wagon R – and the Omni minivan and new Ciaz sedan. Maruti plans to offer the K10 automatic manual transmission featured in the Alto in most of its models.

While Maruti is successfully facing the challenges of the marketplace, internal controversy continues.

The automaker’s plan to transfer its proposed Gujarat plant to Suzuki Motor Gujarat, a new, wholly owned subsidiary of Japanese parent Suzuki has put Chairman R C Bhargava on the defensive. He concedes Suzuki owns Maruti and must “look after its interests” and says, more directly, “Maruti is not remote-controlled by Suzuki – its management is directly controlled by Suzuki.”

Bhargava also argues Maruti’s share price has climbed from Rs125 ($2.03) at the time of issue to Rs3,300 ($53.58), but he is silent on the role Indian management and organization have played in achieving this growth.

Indian law requires approval by 75% of minority shareholders for Maruti to transfer the site of the proposed Gujarat plant to Suzuki. A yearlong effort to persuade them to vote for the move has made no headway, leaving Maruti to wait for the government to lower the approval threshold to 50%.

Suzuki Motor Gujarat would build and operate the 250,000-unit-capacity plant, while Maruti Suzuki would handle distribution and sales. Suzuki reportedly is developing a compact SUV codenamed YCA and already is soliciting bids from suppliers, even though the shareholder roadblock could delay production until 2017.