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Old 18th May 2018, 11:21   #1
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Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

Maruti Suzuki set to drive in biggest ever capacity expansion in India - Will build a FOURTH plant.

By 2025, Maruti Suzuki aims to sell 3 million units—about the current size of the Indian market.

Quote:
Suzuki will first expand its Gujarat plant by adding capacity to make 750,000 cars starting 2020. In the second phase, it will build a new plant, Suzuki’s fourth after those in Gurgaon, Manesar and Gujarat. The new factory, location of which has not been identified, will have a capacity of approximately 1.5 million units and is expected to be announced around 2025
Quote:
Production of the new version of the Ciaz—a mid-size sedan—expected to be launched in 2020, will be shifted to the Gujarat plant as well
Quote:
Suzuki is also looking to invest in developing a range of hybrid vehicles and more efficient gasoline engines for the domestic market in the next decade.
Quote:
On completion of the two phases, Suzuki’s total vehicle manufacturing capacity in India will be about 4.5 million or more than double the 1.75 million vehicles it makes now (1.5 million in Gurgaon and Manesar and 250,000 in Gujarat).
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Last edited by volkman10 : 18th May 2018 at 11:25.
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Old 18th May 2018, 14:58   #2
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

That means they expect to double the volume in seven years - around 10% volume growth per annum. No mean feat attempted, given the current high base. The current indications strongly favour them succeeding in this with near decimation of all rivals in all the segments upto 10 lakhs. With bigger engines coming in, they may be successful in moving upto higher categories too. However, parent Suzuki is also not that strong in such higher segments and they may need to depend more on new partner Toyota for that.

As an aside - From a stock investor view point, this projected growth is not at all attractive. Current PE of 33 with 10% volume growth may not be good enough unless coupled with huge value and profit growth. This may not happen due to their weakness in higher segments.

Last edited by CoolFire : 18th May 2018 at 15:17.
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Old 18th May 2018, 21:29   #3
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

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Originally Posted by CoolFire View Post
Current PE of 33 with 10% volume growth may not be good enough unless coupled with huge value and profit growth. This may not happen due to their weakness in higher segments.
With Maruti, it has always proven the market and people's perceptions wrong. I used to think about 10 years back that Maruti couldn't go up the ladder higher than the Swift.

How wrong I was ! The Swift sells 3X of what it did, the Baleno and the Dzire have been super hits selling as much as the Swift did.

Also a Ciaz or Ertiga brings in 4X the revenue of an Alto and much higher profits I believe.

If the company brings in 20-25% revenue and profit growth , the current valuation is justified.
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Old 18th May 2018, 22:06   #4
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

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Originally Posted by CoolFire View Post
This may not happen due to their weakness in higher segments.
We'll find out soon, won't we?

Here's the list of products getting ready for higher segments -

1. Ciaz facelift.
2. Vitara.
3. D segmenter based on Corolla platform.
4. Grand Vitara (Seven seater based on Vitara platform with Fiat sourced 2.0 diesel).
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Old 19th May 2018, 09:17   #5
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

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Originally Posted by CrAzY dRiVeR View Post
4. Grand Vitara (Seven seater based on Vitara platform with Fiat sourced 2.0 diesel).
And this is one SUV I am looking ahead at. I am not particularly looking at 7 seats, but a very spacious 5 seater with a low-range GB and an approach angle which as good as the Japs.
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Old 19th May 2018, 13:16   #6
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

Whoa! At a time when so many MNC car makers are complaining about excess capacity, the boss announces a 4th plant. We are truly witnessing an ace performance from a legend. God knows how things will be 30 - 40 years from now, but what Maruti is doing today will make for good stories to tell our grand kids.

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Originally Posted by CrAzY dRiVeR View Post
Here's the list of products getting ready for higher segments
Except for products that are shared / co-developed with other manufacturers, I'm not at all optimistic about Maruti cracking the higher segments. 20 lakh cars require thousands of crores more to develop and a specialised R&D set. Honda, Toyota, Hyundai etc. are all able to because the cost of developing their expensive cars (e.g. Tucson) is borne by HQ for developed markets (e.g. Camry is made for USA). If a Hyundai Elantra owner is happy with his car, he's got Hyundai USA to thank for the product, not Hyundai India. Similarly, for a C-Class owner, it's Mercedes in Europe, USA & China. Suzuki however is a weakling internationally and doesn't successfully sell big cars anywhere. And the premium segments in India aren't big enough to justify designing an expensive car only for India.

The S-Cross is good, but that's because of Fiat. Its other cars have hardly been impressive. The Ciaz is mediocre (space + price aside), and I've never been a fan of the Grand Vitara.

At its own risk, Toyota might help Suzuki move up the pricing ladder.

Last edited by GTO : 19th May 2018 at 13:47.
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Old 19th May 2018, 13:30   #7
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

Toyota - Suzuki's collaboration will initially evolve into Hybrids after which they will make EV's more affordable including infrastructure supporting EV's ( using their dealership network)

All this investment plans will be considering the cross- badged products and moving into higher segments taking the help of Toyota for Indian market initially and could be exported to specific markets laterwith either Suzuki or Toyota branding.


Quote:
Toyota banks on Suzuki pact for India hybrid drive

Link

Last edited by volkman10 : 19th May 2018 at 13:36.
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Old 19th May 2018, 14:58   #8
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

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Originally Posted by volkman10 View Post
Maruti Suzuki set to drive in biggest ever capacity expansion in India - Will build a FOURTH plant.

By 2025, Maruti Suzuki aims to sell 3 million units—about the current size of the Indian market.
Quote:
Originally Posted by GTO View Post
God knows how things will be 30 - 40 years from now, but what Maruti is doing today will make for good stories to tell our grand kids.
The folks riding two wheelers today as their primary and often only transport will be the ones driving the Alto's and i10s of tomorrow. The roads will come driven by the political need to satisfy the electorate. My compliments to Maruti Suzuki. I just love the way they are setting a scorching pace for others to gasp, wheeze and pant their way to. 20 years from now the Indian car market would probably be consuming 16 to 20 million cars per annum. The fact that the Chinese want to get in (MG) is the most encouraging sign I have seen of late.
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Old 20th May 2018, 12:53   #9
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

Quote:
Originally Posted by Ragavsr View Post
With Maruti, it has always proven the market and people's perceptions wrong. I used to think about 10 years back that Maruti couldn't go up the ladder higher than the Swift.

How wrong I was ! The Swift sells 3X of what it did, the Baleno and the Dzire have been super hits selling as much as the Swift did.
The earlier upgrade by Maruti from Alto to Swift/Dzire class was hugely dependent on Suzuki's strengths in the premium small car segment. Swift platform itself was a globally successful product. The next jump that Maruti needs to do in the next decade won't be so. Suzuki is present in these segments in Japan and outside, but not a strong player at all.

Maruti will crack these segments, but may need to play second fiddle or be at least be an equal footing player to Hyundai, Honda, a resurgent Tata and of course partner Toyota here.

Quote:
Originally Posted by GTO View Post
Except for products that are shared / co-developed with other manufacturers, I'm not at all optimistic about Maruti cracking the higher segments.

At its own risk, Toyota might help Suzuki move up the pricing ladder.
+1 to that. Just like Fiat was instrumental in Maruti's success today in diesel cars, Toyota may just be the vehicle for Maruti's success tomorrow. Still, outsourcing an engine or even powertrain is totally different from outsourcing the entire car. The latter may severely impact margins.

The details of Toyota partnership are yet to be worked out. Given Suzuki's dependence on the partnership in the Global scenario, Toyota is likely to bargain hard and exact their big pound of flesh from all future model/technology sharing.

This may not affect Maruti's customers at all, but may not be too good for its shareholders. Customers will actually be better off because choices for dealerships and fine tuning for both Maruti's and Toyota's cars will go up.
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Old 21st May 2018, 03:31   #10
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

Quote:
Originally Posted by V.Narayan View Post
The folks riding two wheelers today as their primary and often only transport will be the ones driving the Alto's and i10s of tomorrow. The roads will come driven by the political need to satisfy the electorate. My compliments to Maruti Suzuki. I just love the way they are setting a scorching pace for others to gasp, wheeze and pant their way to. 20 years from now the Indian car market would probably be consuming 16 to 20 million cars per annum. The fact that the Chinese want to get in (MG) is the most encouraging sign I have seen of late.

Despite similar population size, China sells 25 million cars per year as compared to 3.3 million by India. The growth potential in India is humongous and MSIL is way ahead of every one. They maybe holding 50-60% of 3.3 million but the dynamics could change as our market grows.

Last edited by Thermodynamics : 21st May 2018 at 03:33. Reason: Grammar
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Old 8th January 2019, 12:02   #11
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

Maruti Suzuki may open its third plant in South India.

Quote:
If the company plans to further expand beyond the current capacity then South is a logical destination to set up a plant

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Old 8th January 2019, 14:58   #12
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

If suzuki wants their version of the Corolla to succeed, then they should think about a better engine, like Fiat's 2.0 diesel, which they already have interest in buying.

Toyota's chassis and mechanical parts, Fiat's strong 2.0L diesel, Maruti's production, sales and service! they can hardly go wrong if you ask me.
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Old 8th January 2019, 15:05   #13
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

The higher segments and any other segment will see growth in SUV/crossover type of vehicles. I think Suzuki can easily crack these segments. Kizashi was good except for the lethargic engines it had.

Also, dont they already have an understanding to use Toyota's plant for manufacturing some of the cars ?

Last edited by srishiva : 8th January 2019 at 15:10.
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Old 8th January 2019, 15:19   #14
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

Is it just me who has a feeling here that Maruti is moving in Nokia's direction. Remember those days, when Nokia used to launch a phone every fortnight and people would go gaga and blindly buy it just because Nokia had best service, more models, easily available. Their products lacked vision and most products had same internals with new shell. It just needed an Apple to set the trend and wipe off Nokia. While I agree, car industry is way too complex, I think the time is just ticking!

Last edited by PrideRed : 8th January 2019 at 15:21.
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Old 17th January 2019, 12:28   #15
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Re: Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India

Maruti Suzuki 's most busiest two years is in progress - goes on an aggressive mode.

Quote:
Maruti Suzuki is expecting a growth rate of 6-8% in 2019 with volumes of 1.9 to 2 million units before the market absorbs the price increase in 2020
Maruti-Suzuki in onslaught mode - Plans a FOURTH plant in India-1.jpg

- Investing over Rs 13,000-14,000 crore in new products, technologies and expansion of plant capacity over the next couple of years.

- Is on track to come out with at least 10-12 new models in the next 18-24 months, including upgrades and facelifts

- Company will launch four new small cars in the next 18 months

WagonR / Future Concept S ahead of the festive season (codenamed Y1K) / New generation Celerio (YNC), exactly a year later and
Wagon R EV in 2020

- Alto 800, Ignis, Eeco and Super Carry will get upgrades for meeting the new Norms.

- Baleno and Vitara Brezza — will get a facelift, too, apart from new engine additions to Vitara Brezza (petrol), Ciaz and Ertiga (1.5 litre diesel engines


Quote:
A vehicle based on Toyota Corolla Altis for its Nexa channel, beyond getting support on 48-volte hybrid system from the Japan’s largest carmaker and the all-new Wagon R EV
Source:

Last edited by volkman10 : 17th January 2019 at 12:32.
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