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-   -   Maruti-Suzuki not entering EV segment in the short term: RC Bhargava (https://www.team-bhp.com/forum/electric-cars/240975-maruti-suzuki-not-entering-ev-segment-short-term-rc-bhargava.html)

The country’s largest carmaker, Maruti Suzuki, will not enter electric vehicles in the short term and will enter “only when it is feasible” to sell reasonable numbers, chairman R C Bhargava told shareholders at the company’s 40th annual general meeting. In the passenger vehicles segment, a few manufacturers have brought EVs, "but the sales volume is minimal, and it has had no impact on the market share of Maruti Suzuki," Bhargava said.

“Maruti Suzuki is the leader in the passenger vehicle industry, and it fully intends to have leadership in EVs. But it is important to understand EV penetration will only happen in India when conditions become such that consumers can buy it,” he said.

Source:
https://auto.economictimes.indiatime...rgava/85613178

Maruti is struggling to go to higher segments despite repeater attempts currently. EVs provide a great chance for any budget carmaker to make brands cool and enter premium segments. Nexon and ZS are selling very well and with more models lined up by Tata in the next 2 years, sales are gonna grow rapidly. Maruti is already losing market share this year to the likes of Tata, Kia, etc... It's definitely going to get ugly if they start losing market share in ICEs and EV sales pick up in the next 2-3 years parallely.

When the point of inflection comes I hope Maruti is still years away from making an EV.
Their outlook towards R&D is same as what Premier and HM used to have in 1980s.

Dont innovate, make cosmetic changes and keep selling outdated stuff. That is the Maruti Mantra.

Maruti and Toyota will bring in strong Hybrids in 2022, while the EV's will come in a phased manner beyond 2023.

Link

Makes perfect sense to me. Let other brands build the EV segment with their blood, tears and sweat. Maruti can always swoop in later and take away 50% marketshare. That's exactly what Maruti did and cornered diesel car sales during the last decade.

In the Indian market atleast, the first mover does not have a significant advantage. Maruti can always borrow EV tech from somebody else.

What a strategic decision:Frustrati

Looks like they don't intend to keep their market share intact. Reminds me of how Honda kept on saying they'll match frugality of diesel with their petrol motors when the whole country moved on to diesel and they brought their diesels at the fag end of the diesel frenzy after having missed the bus entirely. Maruti can't accept they don't have the wherewithal to produce competent EV's. For a change, this time they didn't tarnish EV as a product just like their marketing did to diesel cars when it ceased to have one in their line up.

Maruti is too conservative. If there's one manufacturer who can bring about changes in the Indian automotive scene, it's Maruti. Sadly, they turn their face away and happy seeing the game from outside before jumping in. A case in point is 5 door Jimny instead of the 3 door, this is even after seeing the juggernaut called 3 door Thar and it's unprecedented sales and waiting period. They just can't think about a product that doesn't give their traditional volumes. Not to forget, this is the same company that brought the SS80 followed immediately by two products that were totally distinct back in those times - the Omni and Gypsy. Agreed, a lot of water has flowed under the bridge since then.

Kodak, Nokia, Blackberry...

Am not saying that Maruti Suzuki will be taken out in future, but this decision might be a Kodak moment for MSIL. I can understand if they had already made a strategic partnerships for EV with another technology leader, but without that it's a big decision that can tilt it's scales.

It worked for them in the early part of the decade but it's not the case anymore. Their market share in compact SUV (sub-4m) declined as the sales stagnated while the segment continues to grow rapidly. All the incremental sales going to the likes of Nexon, Venue, Sonet, Magnite, etc... They are never able to reach even a 10% market share in the mid SUV segment with S-cross. It's less than 5%. They are still doing well in hatchback segments helping them to stop the rapid market share declines.

It may be anecdotal, but I have not seen anyone I know bought a Maruti in the last 2-3 years, whether it's due to more options or people becoming more aware of the choices available due to internet adoption, etc... That was not the case earlier. Earlier Maruti used to be the safest option, now it's the boring option.

I strongly believe they will never be able to get a 50% market share in EVs. In fact, I think it will be difficult for them to get back the 50% market share in ICEs itself. They lost a 5% market share this year vs last year.

Interesting stance. The thing about Maruti is, they have such good brand value in India in the sub 10-L segment that even if they bring in an EV 1-2 years late, it will fly off the shelves compared to products from other manufactures. They will also almost certainly maintain their reliability and fuss free ownership standards even with EVs.

I suppose they want others to put in the hard work of building a charging network and fixing early niggles with the technology in Indian conditions, before they swoop in and buy/lease the charging infrastructure that will be cheap because of low EV adoption/volumes.

My guess at rationalising Maruti’s EV strategy. Not for serious reading!

Observation A - Maruti is able to dominate only under 10-12 lacs price point.

Observation B - A decent EV passenger car in today’s world is upwards of 10-12 lacs price point.

Conclusion - Maruti’s strengths and EVs prices are not compatible. Makes no sense to launch EVs in the current scheme of things.

Future prediction - Wait till price point of EVs comes down significantly to Maruti’s territory. They will storm the market and make it work.

On a serious note, Mr Bhargava’s comments align to what Toyota has been saying all this time.

This strategy has a lot of Toyota speak behind it. Toyota has been a critic of full EV's from the beginning and has chosen to focus on Hybrids. Maruti was busy testing the Wagon R EV before the Toyota alliance and that project must've also been put in cold storage to focus on bringing in Hybrids.

To be honest, from a business point of view I agree with Maruti here. ~7-10k vehicles a year is too small a market to make business sense and with the position Maruti has in India, they can easily afford to watch from the sidelines and enter once the volumes grow. They do not need to be the first mover here.

They don't have the know how and are hoping Toyota will save them. Heck Toyota themselves are a decade behind in the race.

Q.How many successful EVs do Suzuki sell globally
A. ZILCH! I understand the excuse the Indian market isn't ready, what about rest of the world?!

The problem is Hamamatsu hq is not interested in making massive investments in India, wherein immediate returns are not guaranteed. India is simply a cash cow! They already hate having to cope with the governments tighter emission and safety norms, simply hate it!

Suzuki India is struggling to develop a BS6 diesel engine, EVs have not even entered the boardroom agendas yet! Even if they do have a India viable model in their portfolio, they'll dilly-dally over a decision for years, case in point, Jimny's India launch!

Would love to see them caught asleep at the wheel and only wake up when the public realise beforehand and start dumping their shares.

The demise of Maruti will breathe fresh life into the Indian auto sector.

Fair enough from the pov of keeping the shareholders happy for now.

In summary Maruti has indicated/said the following:

Maruti does not need to focus on,

1. Safety.
2. Performance oriented cars.
3. Alternate fuel vehicles.

We also know that Maruti has not been able to break the glass ceiling of 20L Rs.

This is great example of a company having a MYOPIC VIEW.

At some point in the future, Indian customers may be more demanding and may seek the above mentioned stuff on their daily drive cars. Leave aside the topic of actual R&D investments in those areas. Companies spend money on marketing and PR to show that they are getting ready for the future. But here you see a company gloating about the opposite. rl:

Maruti needs new blood.

No surprise.

MSIL is a volume player. Unless they see volume, their business case has inadequate return on investment.

Quoting the full statement by Bhargava
Source

Maruti has benefited enormously from the stupid regulations governing the Indian auto sector (the highest import duties in the world, the 20% difference in GST between sub 4m and >4m vehicles, the lack of crash testing or safety requirements) which played to the strength of someone with massive scale in India and negated the strengths of those with global scale. They are legitimately milking their first mover advantage here, and have built on it by innovating made for India products and setting up an unrivalled national service network. I agree fully that affluent Indians living in metros very rarely see people we know buying Marutis (and the Ertiga is the most common Maruti we see). But South or Central Bombay is not India - and Maruti has maintained a 50% market share more than 25 years after international competition arrived.

So will they succeed in a post EV transition world? I will never count this company out. They have displayed a remarkable ability to know what the mass market Indian customer wants and to move at the right time when segments scale. The only mass segment where they have failed so far is the ₹12-18 l above 4m SUV, which has been created by Hyundai and Kia. I would be more interested in seeing if they can play the catch up game here and win this segment - if they do, my money will be on their winning EVs too (when sales reach 10,000 per month and not 4,000 per year).

This is the crux of the problem, IMO. The GOI has stressed the need to move to EVs, even encouraging through all the rebates. Unless we have manufacturers coming up with newer and better options people won't simply adapt to EVs. TATA Nexon is a classic example. Give people a bang for the buck car, and see them react. Along the way infra will improve as more and more people invest in EVs. The demand would fuel the infra growth.

It's not going to be any other way. So ideally Maruti, being the market leader it is, should foray into the market. Test the waters atleast, albeit with a smaller car.