Our outlook is very positive & cautiously optimistic for FY23: Shashank Srivastava, Maruti Suzuki

Shashank Srivastava, Senior Executive Director, Maruti Suzuki, talks about New Age Baleno, bookings and challenges, the outlook for FY23, EV plans, scrappage centre and launch pipeline among others during an exclusive interview with Swati Khandelwal, Zee Business. Edited Excerpts:

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Q: Baleno has been a very successful and top-selling product of the company. Have the company's expectations has increased with the launch of the New Age Baleno?

A: Definitely. We have added many such features in the New Age Baleno that has been launched which were been known by the feedback of our consumers for a long time. It is a very successful product but the consumers wanted these additions and our complete research has provided this insight to us. As you mentioned that it is among the top-selling cars, in fact, in the Indian auto industry this is the car that has 

touched a 1 million sales target at the earliest. It has crossed the 1 million number in just 72 months and none of the vehicles has touched that mark so early to date. This is a record. So, we expect that this will increase our market share in the premium hatchback segment and we will try to increase its volume.

Q: You have a different challenge at this point when the demand is so high but there are supply constraints you have 2.7 lakh bookings at present, which is a very big number as you used to have bookings for around 1 lakh units and now you are coming with new launches, which means the challenge is about to increase? 

A: It is so that this problem of waiting periods has occurred because the bounce-back that happened after the COVID was very fast as people went towards personal mobility and separated themselves from shared mobility and public transport. This separation led to a good bounce back. At the same time, there was a problem with semiconductor supply due to which the waiting periods increased a lot. But, we expect that this problem of semiconductors will be resolved soon and if I will provide some data like we produced 40% in September, 60% in October, 85% in November, 90% in December and 92-93% in January, which means that progressively the situation is getting better. And, I expect that this will also turn 100% but yet it is difficult to say that by when it will turn 100%.

Q: At the same time, there is a surge in demand due to which the number is going up and if 100% is attained then also the booking numbers will be heavy.

A: If the semiconductor supply comes 100% or more then definitely, we will like to increase our production, which will help us in reducing the waiting period.

Q: What is the number with which you are working production-wise?

A: In the domestic market, it stands around 1.35 lakh to 1.40 lakh vehicles.

Q: How much it can be expanded if the semiconductor issue is resolved?

A: Our overall capacity stands at 2.2 lakh units of cars if we combine the plants of Manesar, Gurgaon and Gujarat. So, the capacity is quite high. So, there is a scope.

Q: How does FY23 look to Maruti Suzuki? Do you have plans to revise your guidance, estimates and projections with new launches like Baleno as we can say that the two difficult years of CORONA have been addressed to a great extent?

A: We are very positive and optimistic for the next year but I will say we are cautiously optimistic because several things are out of our control. But if you will have a look at the current demand patterns then there is a good flow of bookings and enquiries. A few days ago there was a convention of SIAM participated by all the manufacturers, I was representing Maruti Suzuki there, and there was a talk related to demand projection for the next year. In general, it is felt that the demand will be good and its range will be between 3.36 million to 3.53 million. Like if you will look at the year 2021-22, it is believed that this year's sales will be slight below 3.1 million by March-end. So, there is a growth and the expected growth ranges between 10-12%. Interestingly, this year despite the semiconductor shortage if there is an estimate of around 3.30-3.70 lakh by March-end but last year it stood at 2.71 lakh, which means there has been a growth of around 14-15%.

Q: You are quite bullish on CNG and you are also launching a CNG variant of almost every vehicle. But when we will get a chance to see an electric vehicle (EV) by Maruti Suzuki and there are reports you are moving towards mass electric vehicles along with Toyota and Suzuki. So, will you bring any electric vehicle of Maruti Suzuki in FY23 in India or not?

A: As I have said earlier that we will launch our electric vehicle before 2025. That's all I can say at this moment as we are working in that direction and we have also announced that we will come up with it by 2025.

Q: By 2025 means, it can happen even next year?

A: (Smiles). I think it is a bit difficult but as you know that I cannot provide the forward guidance of the product and its timeline but yes, we are working on it. As far as EV is concerned, I would like to say that there is a consensus about the EV in the industry that there will be a point when there will be early adoption of EV and at a great pace and that point of inflexion will definitely come in the coming days but there is no consensus on when it will happen. At the same time, we have to look forward to the charging infrastructure.

Q: But as a market leader what is your belief and what and when is that inflexion point? 

A: We are doing our core analysis but if seen, generally, then the available analysis and the reports based on India's charging infrastructure and the current technology of battery and its costing - remember of the cost of EV, 50-55% cost belongs to the cost of the battery - and due to the existing technology, the cost of acquisition is not reducing. So, I think and based on the research findings, an inflexion point can be reached by 2027-28. In fact, the projections are that by that period EVs will be about 10% of passenger vehicles.

Q: You have also started a scrappage centre. What kind of trends is visible on that front and going forward what are your projection from the centre in terms of numbers and the number it will bring to your books?

A: It is being analysed and the study is being done on it. But I would like to say that the scrappage policy and the states where it has been announced in terms of years, in which some have announced the diesel vehicles should be done away in 10 years and others after 15 years among others. With this, it is clear that there would be a good increase in the replacement demand. And when the cycle will start and I think it is starting from 2023 and with it, the replacement cycle that will happen will bring a big change in the industry. At the same time, scrappage of the vehicles is not an easy task, it is quite a technical thing and this is why we want to contribute to that both as a good business opportunity and also it is a contribution because you just cannot dismantle the vehicle just like that. There is a specific technology for it and how do you deal with those materials that have to be recycled.

Q: How many new vehicles will we see in FY23 from Maruti Suzuki, you can also talk about the number of launches if you don't want to provide the name of the models?

A: (Chuckles). I will have to count the numbers as there are many but we will certainly try to expand our portfolio in several segments where we are weak. We will also upgrade some of the existing models. It has always been the philosophy of Maruti Suzuki of being aggressive in new products. We have 15 models, which is the largest portfolio of the company. Among any OEM or manufacturers, we have the highest number of models and recently we have launched the Celerio, then Baleno and a few more launches will be made in the coming days. We will try to overcome the weakness that we have in the market and perform better.