Maruti Suzuki to increase production to overcome demand
Maruti has recently succeeded in creating a frenzy by its new launches, including the Vitara Brezza and Baleno. Both these vehicles have long waiting periods, thus, a customer has to wait for a couple of months for getting the delivery, depending on the model. By seeing good selling rate for both these models, Maruti is now planning to increase the production rate of the Vitara Brezza by 30%-50% to 1.2 lakh units, and the production rate of Baleno by 10-15% for the present financial year. Furthermore, by seeing the customer’s interest, the new plant in Gujarat is coming on stream in January of 2017 with the first vehicle Baleno, and the brand is willing to add the updated Swift as its new product at Gujarat Plant.
Suzuki Motor, Maruti’s Japanese parent, has invested a huge amount i.e. around 2500 crore, at the new Maruti manufacturing plant in Becharaji, Gujrat. By trajectory plans, Suzuki is expecting to further invest another Rs 2500 crore in the Indian manufacturing field by 2018. This will include work of the new plant, and expansion plans of the existing two plants in Gurgaon and Manesar.
Despite the automotive industry showcasing just 4% growth rate in the past four years, Maruti Suzuki has managed to clock a whopping 30% growth, from 1 million vehicles in 2012 to 1.3 million vehicles last year. Maruti has further held its highest market share in passenger vehicles for a decade and a half, and claimed a 46.70% share in 2016. Meanwhile, for passenger cars, it had a 52.7% market share in the last fiscal year.
While delivering the speech to 200-300 vendors in Bangkok towards the end of April, Maruti executives confirmed that the company is planning to commission close to half a million capacity within a period three years. To achieve the target of making 2 million cars a year, Maruti will need to ensure that it compounds an annual growth rate of 10% every year, until 2020. But a Maruti delegate called the information hypothetical and denied to comment.
In-line with this awaited growth, Maruti Suzuki has officially requested its vendors to ensure they have enough investment capital for the future, as the company is aiming to achieve a double-digit growth rate every year till 2020.
Despite the fact that Maruti is facing stiff competition from other carmakers, the country’s biggest manufacturer is currently concentrating on its future by encouraging its vendors to increase their capacity and set up new plants where required.