Maruti has a green target of a million vehicles

A lot is happening at Maruti Suzuki India, the country’s largest automaker by volumes. The company, which discontinued diesel variants, is aggressively trying to compensate for the loss in volumes due to the slowdown in the industry last year by pushing more hybrid sport utility vehicles (SUVs). At the Auto Expo 2020, it launched the Vitara Brezza in petrol and mild hybrid options, along with the Ignis facelift and the Swift Hybrid. The company, which hasn’t launched an electric vehicle (EV) yet, also unveiled the FUTURO-e concept SUV at the expo. For new product developments and plant renovations, the company has announced an outlay of ₹4,000 crore this year.

On the sidelines of the ongoing expo, Fortune India spoke to C.V. Raman, senior executive director at Maruti Suzuki India, about the next-generation mobility, ongoing slowdown, and the company’s push towards hybrid. Edited excerpts from an interview:

What are your turnaround measures for the slowdown?

We’re doing our bit in making sure that transition from Bharat Stage (BS) IV to BS VI happens quickly with fewer inventories and that there is less confusion at our dealers end. Second, from a financing and affordability perspective, we’re trying to make sure that the right products are being made available to the customer. There are some things we can do but we cannot change the mindset of the customer. We can infuse him with new products.

But your new launches at the Auto Expo this year have mostly been facelifts. When will see a new product from you?

Each product has a life cycle and during the mid-cycle, there is some upgrade that happens. The transition will happen into the new models from time to time depending on the products and their life cycles.

You’re also moving away from diesel vehicles despite their significant market share.

It’s a combination of two factors. We believe the cost of BS VI is going to go up due to the after-treatment. Because of that cost increase, the total cost of ownership for the customer is going to increase. Economically it doesn’t make sense. The fuel efficiency of petrol is similar to what diesel is giving. The difference between petrol and diesel today is ₹5-6 and in some states, it’s even higher. Because it’s moving out of the hatch segment, the volumes are going to fall. It might only be in the MUV (multi-utility vehicle) or the SUV segment.

You are one of the last adopters of EV. How optimistic are you now?

We have a 1-million green target. That is going to be on the back of CNG, hybrids, and maybe near future the EVs. Not just on electric, we’re looking at CNG, smart hybrids, and electrification and all of these can help us in reducing the carbon footprint. Future-E is meant to showcase our design language to our future Indian customers. But, going forward, the future could be anything—ICE (internal combustion engine), smart hybrids, or pure electric.

If the charging, infrastructure doesn’t come, what is the better alternative for oil import? Hybrid is the self-charging system that can reduce the carbon footprint by about 30%. So, why shouldn’t it be looked at is the discussion which we’ll continue to have. It’s difficult to say what kind of change will happen in terms of GST [on hybrids]. Technology agnostic approach has been followed across the world and EVs have survived only on the basis of incentives. It’s not sustainable [independently]. You need to find something which is more sustainable.

Vitara Brezza was your brainchild and the first SUV from the Maruti stable. Since SUV is the largest growing segment in India today, is your focus moving away from the small-car segment for the time being?

We as a manufacturer operate at the entry-level up to the top and from the lowest price point of ₹3 lakh to ₹12-13 lakh, catering to different types of customers; every ₹25,000, you’ll find a different variant and that has not changed. We believe if a two-wheeler customer wants a car, we want them to come to us. We still want to catch the entry-level customer with the Alto or the S-Presso. Then we want to keep them within our portfolio and upgrade him to a Wagon-R or to an Ignis. Having said that, the only segment which is growing today is the SUV, not the sedan or the hatchback. We will continue to strengthen other segment but because the growth is happening is SUV, we will, maybe, have more SUV or SUV-type products.

Your competition is ahead in the connected-SUV game. What can we expect from the company in terms of technology upgrades?

The future is connected and the interior is going to become more technology-dependent. Now, it’s more about the infotainment options, comfort, convenience, and customisation. When we launched the infotainment system in 2015, we made it Apple- and android-compliant. It’s now getting into voice-based commands. In the new system, we have provided an option of live streaming. So, whatever the customer is listening to at home, it connects to the vehicle. Our Suzuki Connect helps in geofencing to track the vehicle and driver performance. These things are only going to grow.

Is ‘Making in India’ difficult when it comes to electronics inside the car?

Yes, but I would look at it more as an opportunity. Till now, we have missed the first phase of the electronic transition but we should not miss the next one. Power- and motor-based electronics are required for both hybrids and EVs. Now, what can provide us more volumes, what can help in localisation, where can we put the money (whether in infrastructure, or subsidies, or reduction of GST) are some questions that need to be discussed.