'For Maruti, exports are increasing and will almost double this fiscal'

Maruti Suzuki looks set to emerge as the largest vehicle exporter out of India in the ongoing financial year. The carmaker is likely to post exports of around 200,000 vehicles in FY22, as managing director Kenichi Ayukawa tells Sharmistha Mukherjee that the number will double from last fiscal year (in FY21, Maruti Suzuki shipped more than 96,000 units). Edited excerpts:

Maruti Suzuki has seen healthy bookings after the second wave. But disruptions in production resulted in the company losing out on market share last year. What measures are you taking to regain volumes?
We recognise the situation. In the beginning of last year, we were facing big trouble because of Covid-19. In April-May, we lost a lot of production and business opportunities. After that, we tried to recover, but suddenly there was a shortage of chips. That condition is still continuing. We believe that we have a lot of potential and we have a big production capacity of more than 2 million units. The third Gujarat plant has already started operation; we are adding 250,000 units of production capacity there. If the (supply) condition becomes better, we can produce close to 2 million volumes easily.


Do you expect the momentum we are seeing in the market to sustain going ahead?
I hope so. The government also prepared a very aggressive budget, which is encouraging. We are expecting we can keep demand for a while. But the point is the supply-side concerns. The entire industry is facing difficulties due to the shortage of components. If the situation improves, we can increase supply.

When do you expect the supply situation to normalise?
I have no idea, unfortunately. We have to wait for some more time. If we can receive a good enough volume of components, the market demand there remains the same as today, we can achieve over the 2018-19 volume.

On the export front, Maruti Suzuki has seen a strong increase this fiscal year...
Unfortunately, for domestic sales, chip (availability) is a little bit constrained, but the export version of the chips, we can get. That's why we are trying to increase (exports). Also, globally, demand is very strong. That's why exports are increasing and will almost double (this fiscal year). Additionally, with the government encouraging indigenous manufacturing (Atmanirbhar Bharat), export volume is increasing. We are following the government direction.

The corporate average fuel economy (CAFE-2) standards, which are set to come in next year, will raise vehicle acquisition cost . Do you expect a hit on demand?
As an industry, we are requesting some benefit (pushing back the regulation) on those kinds of points. We are not getting a response from the government clearly. The government is trying to encourage the economy and the automobile industry is a big factor. (If) the automobile industry grows, the economy will grow, government's tax revenue will increase. We can also contribute towards generating employment. I agree the government is heading in that kind of direction, maybe they (will) support the industry.

What would be the company's fuel strategy given the government drive towards clean mobility?
We are not so much focusing on one alternative; we are trying to prepare various alternatives. CNG is one way. Ethanol (blending) and flex fuel also are good ideas for reducing oil import, are environment friendly. And electric vehicles also. We have to carefully make a balance of alternatives and prepare models. The PM has already announced 2070 to achieve net zero (on carbon emission). Maybe the government is preparing some kind of a roadmap. Based on that roadmap, we have to prepare how to cut CO2.

What kind of potential do you see in electric four-wheelers in India?
We are preparing some EVs for some sections, not for everyone. In the future, maybe, if EVs become popular and there is charging infrastructure, we are producing electric energy from renewable sources, etc., in that case, maybe EVs (will) become mainstream. It takes time, we have to prepare in steps. Of course, in 2025 we will launch an EV in India. We are expecting some volumes.

A lot has been spoken about the safety of Maruti Suzuki cars. Do you think there is a need from the company's standpoint to enhance some measures?
We have to carefully check safety devices in our cars. We have the test course to check every product as per global standards and also comply with Indian standards. We also have to do some device installing, keeping in mind the market situation and customer preferences. In the case of the Baleno, we are selling it with six airbags, as some customers expect such specs. India is already reaching European levels in terms of safety. Unfortunately, in the country there are a high number of fatal accidents. We need to analyse why it is so high and try to find out a solution with the government. It is very very important.