Why Maruti Suzuki is Not Planning to Launch Electric Vehicles in India Any Soon?

Harshit Verma Harshit Verma
Jan 10, 2022 8 min read
Why Maruti Suzuki is Not Planning to Launch Electric Vehicles in India Any Soon?

The world is moving really fast. It was never in history that we had the luxury to learn about anything in the world from the comfort of our homes. The information that we deal with (on a daily basis) is immense. All of this just doesnโ€™t come up out of the blue, it has a price that we pay every day. The price is some of the other natural resources or some non-replenishable resource. But now the world is witnessing the shift. The shift from non-sustainable methods of human activities to more sustainable methods.

One of the pioneers of such a transition is EVs. It is an acronym for Electric Vehicles. It is forecasted that these cars (or vehicles) will be the future of not just public transport but will be the future of private transportation as well. With that being said, everyone is trying to get into the business of EVs. Every other car manufacturer is making their cars electric.

In an immensely population-dense country, India, the sector is getting ready to launch. Top-notch companies are planning to disrupt this market with some innovation. Except for one carmaker, Maruti Suzuki. The largest carmaker in India will refrain from entering the electric vehicles market in India. This article talks about what are (and could) be the reasons for such waste of potential.

Maruti Suzuki Plans about launching EV in the Indian Market
Why is Maruti Suzuki Refraining from the EV Sector?
When will Maruti Suzuki Enter the Indian EV Market?
Current Situation of Maruti Suzuki
FAQ

Maruti Suzuki Plans about launching EV in the Indian Market

First, let us give you some context. It has been reported that the countryโ€™s largest carmaker, Maruti Suzuki has plans that they will not enter the electric vehicles markets in the short term. This trend of refraining will continue till the market is feasible. Chairman R C Bhargava told shareholders at the companyโ€™s 40th annual general meeting.

Yes, this news surfaced all over the internet. It shook not only the investors but people who had hopes for the company to launch EV. Adding to the news, RC Bhargava, the chairman, told the investors and shareholders that the carmaker has no plans to enter the EV market in the short term. They will only enter the market when the market will show some feasibility in the future. This was seen as the main highlight of the 40th annual general meeting that was held last year.

Adding to the notion of not entering the EV Market, Bhargava said the governmentโ€™s focus is on developing the two-wheelers with the primary goal of electrification.

In the product segment of two-wheelers, Hero and Ola have been innovating. We all know that Hero is trying its best to enter the electric vehicle market and on the other hand it is developing infrastructure for charging electric vehicles.

Ola, the ride-sharing and taxi service startup is also looking forward to an electric future, so much so that they recently launched their product called the โ€œOla Electric''. Ola electric is a two-wheeler that runs on electricity. Thus, apart from the product segments of the two-wheeler category, remains the passenger vehicle segment. This is the primary market of Maruti Suzuki and they are quite unaffected by the newborn electric vehicles in this segment.

Bhargava added that they know that the sale volume is minimal and it is not in much of a magnitude. This easily predicts that folks at Maruti Suzuki are trying to play it safe rather than just jump on what is the hottest trend in the market right now.

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.
Annual EV Sales in India
Annual EV Sales in India

Another fact that is baffling the EV enthusiasts is that other vehicle makers like Tata Motors, Mahindra and Mahindra are already running fast in the EV race.

Tata Nexon EV
Tata Nexon EV

They are so much into Electric vehicles that they have already manufactured a little over a dozen battery-powered vehicles. That trend in those carmakers can be seen among various product segments.

They are even forecasted to be more active in the market in the short future. Up till 2025, they will lead the Indian Electric Vehicles market by much more than the then-newcomer in the EV market, Maruti Suzuki.

Why is Maruti Suzuki Refraining from the EV Market?

When asked why the country's topmost car maker is refraining from the EV market they replied with a rather satisfactory answer. Bhargava mentioned that Maruti Suzuki is currently planning to focus on the Electric vehicle segment, without making a loss on its basic and natural operating cycle. This was what he replied when investors enquired about the Electric vehicle segment.

In response to queries from several shareholders, Bhargava said Maruti Suzuki is looking at the electric vehicle (EV) segment without making a loss on operations.
โ€œMaruti Suzuki is the leader in the passenger vehicle industry, and it fully intends to have leadership in EVs. But to be sure, Maruti Suzukiโ€™s focus in the short term is CNG and hybrid vehicles โ€“ until the time EVs reach a certain scale. On its part, the companyโ€™s sister arm โ€“ Suzuki - and Denso and Toshiba, have already started working on localization of lithium-ion cells and engaging with the vendor fraternity to have a deeper localization to deliver an EV โ€œthat is accessible and delivers enough scale to add to the bottom line.โ€ ย he added

After the statements by Maruti's Chairman, one thing is clear that Maruti Suzuki has hopes for electric vehicles, but it doesnโ€™t want to just jump right into the trend. It is waiting for a little more stabilised market in the Electric vehicle market and until then, Maruti is cleansing the company to better fit the EV market in the future. It is not scared of the innovations but just doesnโ€™t want to regret any early investments. After all, it is such a big organisation and also holds a lot of expectations.

When will Maruti Suzuki Enter the Indian EV Market?

Suzukiโ€™s parent company had said an India special EV might be ready by 2025. Regarding issues related to climate change, zero-emission and carbon neutrality, India has to follow its own schedule and not be pressured by the timelines set by more developed nations in the world, the chairman asserted.

โ€œYes, we must work with the rest of the world, we must be concerned about climate change, we must go on to reduce emissions. But we and the world have both to recognise the disparities in income and living styles and the disparity in the consumption of energy per capita in the developed world and India," Bhargava answered.
The company will be launching an all-new sports utility vehicle next year to expand its footprint in the fast-growing segment in the mainstream market. The development work on the vehicle is underway, which will be introduced shortly. โ€œOnce we have the SUV next year, we will have more market share in that areaโ€, he added.

It is clear from the above statements that the company clearly understands what the Indian user would want. It is true that the whole of India is not readily agreeing on shifting to electric vehicles and it will take some time. Until then Maruti plans to do more research and development on prospective investments.

Current Situation of Maruti Suzuki

If we look at the current situation in the product segment, we will find that Maruti Suzuki is the dominator of the vehicle segment. It has, in the local markets, very well accepted cars like that of Wagon R, Swift, Baleno, Vitara Brezza, Ertiga, XL6 and the S-cross. On the other hand, Hyundai (Korean rival) has made good growth in the SUV category.

Top Best-Selling Cars of December 2021
Top Best-Selling Cars of December 2021

Separately, Bhargava said while Maruti Suzuki has faced some loss in production due to the shortage in availability of semiconductors, it is not of major concern. The current shortage of semiconductors facing the automobile industry is temporary, partly caused by the outbreak of the coronavirus pandemic and is expected to be over by 2022.

"Meanwhile, there has been a bit of a hit on the production of vehicles, and we have had to adjust, but there is no major loss that we have to be concerned about," Bhargava said.

Bhargava has a thought process. That is, he thinks that India has to look after the citizens' needs and wants. The only way to do that is to increase the lifestyle of individuals. They have to be better equipped with income to spend and live a decent life, this will create new demand for not just electric vehicles but everything else.

Not only this, he believes that this will also help in catching up with the rest of the world. The electronic vehicle is a concept that was first released in the outer boundaries of the world where technology is developed. They also enjoy a slightly better lifestyle than most Indians. EVs have to be tailor-made for Indians.

"It will require a much higher per capita energy consumption even if we adopt much more energy efficient means of consumption". Bhargava pointed.
Bhargava further said: "And to do that we cannot follow everything which the West does. We have to make our own schedules and programmes and ensure that we do not adopt rules and regulations, which results in the people of India not being able ever to come up to the point of levels which they need to come up with to reduce (the gap) with the rest of the world."

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Conclusion

The above article points to the boundaries and the centre of the news piece that showed everyone. It is true that the homegrown vehicle maker Maruti Suzuki has hopes and aspirations for Electric scenes in India. But it surely does not want to do that in haste. Maruti has reported some slight losses due to manufacturing issues due to the unavailability of semiconductors. This however is not a big issue and they are getting better everyday. Maruti plans to be a little more stable in operations before they start investing in the Electric vehicle segment.

The news smoke came even when rival companies like Tata Motors and Mahindra and Mahindra had lined up a lot in the Electric vehicle domain. It is forecasted that up until 2025 they will launch some dozen more EVs for citizens.

To those queries, the officials have already answered the raised questions. Bhargava said Maruti Suzuki is looking at the electric vehicle (EV) segment without making a loss on operations. India is a special market for everything, not just in the segments of the electric vehicle.

One who understands the markets and the needs of Indian customers are set to rule the market. Maruti over the years have done really well in the passenger vehicle segments, and this is good proof of their understanding of the Indian scenario.

FAQ

Is Maruti coming with electric cars?

Yes, Maruti has plans to enter the Indian EV market in 2025.

What is the price of the Maruti electric car?

The Wagon R electric will be priced at 10 lakhs in India, which is slated to launch in 2025.

Why is Maruti not making electric cars?

Maruti Suzuki's chairman, R C Bhargava stated in its annual general meeting that, They will only enter the market when the market will show some feasibility in the future.

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