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Old 11th October 2021, 11:08   #1
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Default Why is Maruti so allergic to Electric Cars?

The EV, plug in and hybrid revolution is slowly but steadily ensuring a marginal to decent share of the market to alternate, non ICE vehicles in almost every civilised country in the world.

Maruti sticks to petrol and CNG. After embracing diesel for some years, then rejecting diesels with the BS VI, rethinking diesels post BS VI and finally ditching diesels MSIL marches ahead. They only have petrol and CNG vehicles in their portfolio with a nearly 56% car market share.

Mr R. C. Bhargava's thinking is that EV's are high priced and are not within the reach of the average Maruti buyers. Despite the age old thinking, MSIL should have had one or two EV's by now in their portfolio to stay in the race.

The news link reveals some interesting points:-

https://qz.com/india/2058668/why-isn...cles-in-india/

Quote:

Why doesn’t Maruti want to sell an EV?

Maruti’s concerns around EVs stem from the price sensitivity of India’s customers, a reason why US auto major Ford failed in India.

“If we look at the Indian market, almost 70% to 80% of the buyers buy vehicles which are below 10 lakh rupees ($13,505), which speaks about the Indian buyers’ psyche. Maruti also understands this very well,” said Ashwini Tiwary, co-founder and CEO of a Pune-based EV tech firm, Autobot India, in an email.

In 2017-18, the average annual per capita income of Indian households was around 45,021 rupees ($607), according to the Longitudinal Aging Study in India, a Mumbai-based research firm.

A majority of Indians possess limited disposable income, which has further fallen due to the pandemic. For most Indians, owning a car remains a luxury because the cheapest offerings from companies such as Maruti and Renault start from over 3 lakh rupees ($4,044) while an average car cost in the country is around 7 lakh rupees.

Despite this, Maruti dominates the Indian market with four out of the country’s five top-selling cars coming from its stable. Its cheapest model carries a price tag of 3.15 lakh rupees ($4,275).

The situation is much different for EVs, which are usually priced at above Rs10 lakh. This is because of the scale and battery cost, which itself is up to 40% of the total EV price. “Maruti will evaluate parameters like cost of manufacturing, battery, mileage per hour, government policies, and proper infrastructure before it will come up its own EV vehicle in India,” said Tiwary.
Will their stodgy ICE technology with no recent worthwhile upgrades, will their hide bound thinking about EV's ultimately prove to be too costly for them ?

Last edited by anjan_c2007 : 11th October 2021 at 11:13.
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Old 11th October 2021, 11:27   #2
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Default re: Why is Maruti so allergic to Electric Cars?

MS is not sleeping at the wheel on this one.

There have been many sightings of the WagonR EV for a couple of years now I think. That is one product that is enough to cater to 50% of EV users' requirements, IMO. Big enough to seat 4 adults, decent boot, highly localized production.

If MS price the WagonREV around 8-9L ex-showroom with a real-world range of 180-200kms, they would have successfully transitioned to EV's overnight successfully.

The studies are right in saying under 10L cars sell. If you put in an EV at that price it will sell like hotcakes. Delayed entry to the market is not necessarily a bad thing. The current players would have created an infrastructure. Created an image, solved some of the issues with EV.

I am sure even MS can't ignore the future and EV's are the future.

Today's petrol prices in KA breached INR110, and diesel breached INR 100 per litre. That is only increasing the need for affordable EV's.

Last edited by Mafia : 11th October 2021 at 11:29.
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Old 11th October 2021, 11:38   #3
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Default re: Why is Maruti so allergic to Electric Cars?

MSIL have some thinking to do, even if they back ICE so much I don't really see any strong upcoming vehicles any time soon apart from few facelifts. They seem to not take any risks.
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Old 11th October 2021, 11:56   #4
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Default re: Why is Maruti so allergic to Electric Cars?

Most of the traditional companies do not want to invest in new technologies and want to milk the existing investments as much as possible. Few companies like VW group realized a bit earlier that EVs are inevitable and will be the future of transportation, so they started investing heavily in EVs a few years back. Even they are slow in transitioning to EVs and still estimating that EVs will only have a market share of 50% in 2030.

Then there will be companies like GM which has an electric car much earlier than the entire industry in the 90s and was killed off despite protests from consumers due to low profitability. It's the same with Nissan. Nissan Leaf is the first mass-market electric vehicle with decent production numbers. People bought it despite the much higher price and relatively low range initially. Any sane management would have seen the popularity of EVs with consumers. But there is little improvement to the leaf in over a decade despite the battery prices declined a whopping 86% in the same period. They are even selling it without active cooling despite battery degradation issues due to lack of that.

On the other hand, we have companies like Toyota, Honda, etc... who are stubborn and don't want to adapt quickly. Maruti is another extreme over the Toyota. These guys only care about quarterly numbers and margins. Maruti's parent Suzuki seems to be even worse in investing in product development.

While many people may not agree with me, Mahindra is similar or even worse than Maruti. They bought an EV company Reva a decade ago and killed it off recently without any progress with EVs. Mahindra would have been well ahead of Tata in bringing EVs if they really had a vision. They could have leveraged the Ssangyong experience which has developed an EV and was ready for release.

I think we have seen the peak of Maruti's market share in India already. I doubt if they will ever reach the 50% market share in the future. They will continue to milk the existing models and engines as long as possible and will be acquired by Toyota well before we see any EVs from them.
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Old 11th October 2021, 12:14   #5
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Default re: Why is Maruti so allergic to Electric Cars?

It's not allergy. It's called incapability, on all counts. Period.

Last edited by Bibendum90949 : 11th October 2021 at 12:23.
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Old 11th October 2021, 12:30   #6
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Default re: Why is Maruti so allergic to Electric Cars?

Maruti is known for its cost effectiveness, more than anything else.

And I think the main reason lies in the cost of the vehicle. Other reason being their vast spread service network which would need to be trained.

Just to put things into perspective an ICE Nexon cost 7L-10L while the EV starts at 14L.

Similarly a Wagon R starts at 5L, going by the cost, a WagonR EV would be somewhere around 9-10L.

This would totally miss the mark on the target audience. It would find very less buyers.

I believe, Maruti will jump into the EV market when the government gives heavy subsidiaries on it, or the cost of an EV comes down to and fits the range of Maruti's target audience.
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Old 11th October 2021, 18:25   #7
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Default re: Why is Maruti so allergic to Electric Cars?

Quote:
Originally Posted by Bibendum90949 View Post
It's not allergy. It's called incapability, on all counts. Period.
Amen!

It's not Maruti but the parent sitting inside the ivory towers at Hamamatsu HQ!

They shared the same attitude towards diesels till they could ignore no more and bought engines from Fiat.

I think they tried to make an EV (Wagon R electric), tested it and came to the conclusion, 'Yeh hum se na ho payega!'
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Old 11th October 2021, 18:36   #8
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Default re: Why is Maruti so allergic to Electric Cars?

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Originally Posted by shortbread View Post
Amen!


I think they tried to make an EV (Wagon R electric), tested it and came to the conclusion, 'Yeh hum se na ho payega!'
You might be on the mark

I think something must have happened to the vehicles, such as fire or other major problems as such they delayed the whole project
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Old 11th October 2021, 18:48   #9
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Default re: Why is Maruti so allergic to Electric Cars?

To recover the difference in cost of an EV vs an ICE you need a car that runs 50+ km in city every day, and ideally a max of 300 km in a day. No logical person with that much running will buy a Maruti.
It makes more business sense for Maruti to invest in the middle of the market CNG and they are doing that.

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Old 11th October 2021, 19:05   #10
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Default re: Why is Maruti so allergic to Electric Cars?

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Originally Posted by iamahunter View Post
I believe, Maruti will jump into the EV market when the government gives heavy subsidiaries on it, or the cost of an EV comes down to and fits the range of Maruti's target audience.
Times are changing, tech is changing and the mindset of the public is changing. A whoppig market share is not Brahmastra. Ask Nokia, which held 38.06 per cent of market share in India in 2004.

Last edited by Aditya : 12th October 2021 at 05:17. Reason: Sarcastic bit deleted
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Old 11th October 2021, 19:24   #11
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Default re: Why is Maruti so allergic to Electric Cars?

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Originally Posted by shortbread View Post
Amen!

I think they tried to make an EV (Wagon R electric), tested it and came to the conclusion, 'Yeh hum se na ho payega!'
+1. I actually used to see the electric Wagon R everyday without fail. I stay near the Maruti plant on the old Delhi - Gurgaon road and the EV Wagon R went up and down throughout the day 2 years back. Then all of a sudden it disappeared. Haven't seen it since.
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Old 11th October 2021, 22:00   #12
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Default re: Why is Maruti so allergic to Electric Cars?

Forget EV, Maruti is even allergic to new and modern petrol & diesel cars for its customers. The delay in launching Jimny for this market is a classic example of how lethargic and inept Maruti leadership has become. I really wish sales of Maruti vehicles go do down from here on drastically so that it will act as a wakeup call for its lazy management team to start offering quality automobiles for us Indians.
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Old 12th October 2021, 13:54   #13
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Default re: Why is Maruti so allergic to Electric Cars?

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Originally Posted by iamahunter View Post
Maruti is known for its cost effectiveness, more than anything else.

And I think the main reason lies in the cost of the vehicle. Other reason being their vast spread service network which would need to be trained.
Cost effectiveness cannot be achieved by small scale production. Mass production means economy of scale and batteries, are yet to reach that inflexion point.

Unless companies develop products, this cannot happen. Would you be able to buy a $200 Xiaomi if they won’t have developed it? In that case the only thing you’d be getting in market would be $500+ iPhones and Samsungs.

The same reason why battery prices moved from $1100/kWh in 2010 to $100/kWh in 2021.

As for training, that would be the same for literally any change expected. When going from carb to FI, NA to Turbo, and so on.

Electric would still need less servicing from start itself.

Quote:
Just to put things into perspective an ICE Nexon cost 7L-10L while the EV starts at 14L.

Similarly a Wagon R starts at 5L, going by the cost, a WagonR EV would be somewhere around 9-10L.
The XE Nexon petrol is a manual, doesn’t have dual tone by default (all EV models are dual tone for some weird reason) and lacks dozens of features you otherwise get on Nexon EV XM. If someone is buying the base EV, they’re getting far more features than the base diesel.

An ideal comparison would be XZA+ (Diesel Auto dual tone paint) Nexon to XZ+ Nexon EV, in case of which, difference is 15.6–12.1 = 3.5L

Are we really comparing the same car if there’s so much disparity in features? You need to keep these in mind too.

This is a popular coy in auto industry where the company throws in extra features in EV base variant to avoid cannibalising sales of fuel variants. I saw this one in FullyChargedShow review of Citröen eC4, which has same strategy.

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Originally Posted by sandeepmdas View Post
Times are changing, tech is changing and the mindset of the public is changing. A whoppig market share is not Brahmastra. Ask Nokia, which held 38.06 per cent of market share in India in 2004.
At least Nokia is still back in business under HMD. Talk stubbornness? Ask Blackberry.

Maruti management keeps larping about hybrids and FCEVs but where are they?

If they so truly believe in hybrids — let’s keep hydrogen aside for a moment as it’s more costly than EVs today — where are proper hybrids like Camry in the Ciaz body? Where is the A cross hybrid powertrain in brezza?

Proof of the pie is in the eating. If they want to truly show that they’re betting on hybrids, do it seriously at least, and quit with the SHVS marketing jargon.

In lack of these, it just seems they’re trying to divert attention from EVs by saying that “We at Maruti, focus on hybrids” while not doing anything at all, even for hybrids.
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Old 13th October 2021, 09:20   #14
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Default re: Why is Maruti so allergic to Electric Cars?

Maruti doesn't know how to make a proper AT gearbox, so designing an EV is a long shot - here is my related thread (Maruti sleeping at the wheel | Where are the new car launches? | Why is Maruti missing new trends?) on how the company is slacking. Maruti simply doesn't have the R&D capability to build an EV.

Toyota will bail them out though. The "Big T" is now putting big money on EVs (after a failed bet on hydrogen) and will supply that tech to Maruti.
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Old 13th October 2021, 09:33   #15
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Default re: Why is Maruti so allergic to Electric Cars?

You have to change with the market, be one step ahead (at least have a plan, especially if you're a company). Even if the market hasn't completely shifted to the EVs, that's surely the future.

If Maruti/Suzuki doesn't go after EVs, I personally feel it may face the same fate as Nokia down the line.
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