In an interaction with Business Standard, Maruti Suzuki Chairman R C Bhargava said the rampup would include production of 250,000 cars in Kharkhoda in Haryana and another 250,000 in the Gujarat plant. This would be undertaken gradually, with the production number expected to hit 500,000 by the end of FY27.
Bhargava pointed out that these factories have flexibility in their assembly lines to shift from one model to another which will help them in meeting the large demand of small cars which are in the waitlist. “Currently, our dealers have an inventory which is as low as just a week when the general norm is to have for 30 days,” Bhargava said.
Replying to a question on the company’s play in electric cars, having launched the e-Vitara in the local market after starting with exports, he said: “With cells being imported, the total import content in the electric cars is higher than 50 per cent. So, we are not eligible for production-linked incentive scheme benefit.’’
But, the largest automaker in India is planning to package the lithium ion batteries in a way that the overall import content reduces and the PLI challenge is resolved.
On lowering of GST rates on small cars, Bhargava said it had given a big push to the industry. Despite concerns that a cut in GST rates would lead to reduction of government revenues, there has not been any impact because small car sales have grown, he added.
Cars up to 4 metres in length and engine of 1200 cc, where GST was reduced from 28 per cent to 18 per cent, accounted for nearly 70 per cent of the sales, Bhargava explained.
On the impact of the US-Iran war on the Indian auto industry, Bhargava said it would take another month to get a clear picture. ‘’What is, however, clear is that prices of raw material such as steel will go up. So will our overall costs of making the car. So, profitability growth will have to be looked at carefully.’’ Stressing that demand will continue to grow, he said the choice is ‘’whether you want to absorb the cost and reduce profitability or pass it on to consumers’’. Many car companies make less than 5 per cent profit and those making EVs are still losing money, Bhargava added.
On the government support to push electric cars, Bhargava pointed out that in most countries like the US, Germany, China and others, the government has reduced or stopped giving incentives. ‘’So, the question is how long can the Indian government do it,’’ he asked.
