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Maruti Suzuki not keen on launching EVs in short term


Maruti-Suzuki-Futuro-e-auto-expo-2020

 

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This post is a part of EV Next’s EV PerspectivesEV Nexta division of EAI, is a leading market intelligence & strategic consulting firm for the Indian e-mobility sector.

Every second car bought in India is from the Maruti Suzuki stable – the company sold about 1.9 million cars of the about 3.5 million cars sold in the country in 2019. 

Yet, this is perhaps the only Indian auto major that has given a relatively muted response to the fast growing e-mobility phenomenon in the country. While the company has been quite decisive about its emphasis on CNG as much as veering away from diesel models, its actions with regard to EVs have been quite iffy last two years – there is a confident statement in one interview and a cautionary statement in the next.

And recently, a fairly strong statement from its MD & CEO Kenichi Ayukawa that they are not planning to launch an EV model anytime soon.


Maruti Suzuki has now publicly stated that they are not in any hurry to launch electric cars in India


That should make anyone wonder why the largest car maker in the country is so hesitant while pretty much every OEM in the country of every make is at least publicly betting on EVs. 

At EV Next, we think the following could be the reasons:

1. Firstly, Maruti Suzuki is one of the few Indian auto OEMs that makes only cars. Mahindra and Tata make more than cars (HCVs, buses…). Given that the electric cars are likely to have a rather poor demand next few years, a car only OEM obviously can take his time unlike other OEMs that are playing in other types of vehicles too (Mahindra for instance started emphasizing significantly on its electric 3 wheeler eTrio)

2. For the 2020-2030 period, Maruti is investing heavily on CNG cars. Maruti’s CNG models are by far the leader in that car segment. The company sold over 1 lakh CNG cars in 2019 and its cumulative CNG cars has crossed half a million sales, and these numbers are slated to increase further in the coming years. Also, by foregoing diesel cars, Maruti will be betting even more on CNG cars, which incidentally is also playing in the same zone as electric vehicles – clean energy and low emissions. It is quite possible that the Maruti Suzuki top management felt that they should focus a lot more on CNG cars at least until 2025. If they did so, I would consider them very sensible.


For the Indian car industry leader, it makes sense to focus on the immediate new growth market (CNG cars) and wait for the dust to settle down and the entire e-mobility ecosystem to develop before shifting significant top management focus towards electric vehicles


3. Well, this point is only a hunch but here goes: the guys from the Suzuki side especially might want to watch out for the developments in the fuel cell front. A lot has been brewing on the fuel cell front in the last two years, and Japanese companies like Toyota already sell fuel cell cars (Mirai) in Japan. Some of the world’s largest auto OEMs such as VW have also been bullish on fuel cells recently. Given all these, the Suzuki guys might feel that a few years of wait was worth it when the mist could clear on who the winner is between fuel cells and batteries.

4. Lastly, how much does Maruti lose really by sounding hesitant about a sector where there is anyway little sales right now!

One might still think it would have been better for the Suzuki honcho to sound equivocal, but hey, he is Japanese!

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This post is a part of EV Next’s EV PerspectivesEV Nexta division of EAI, is a leading market intelligence & strategic consulting firm for the Indian e-mobility sector.

Know more on how EVNext can assist your business in your strategy for the e-mobility and electric vehicles sectors, from here. Know more.


Categories: Electric Cars

Author - Narasimhan Santhanam


Thank you for reading this post – hope it was helpful. You can connect with me at narsi@eai.in. My detailed profile here and my LinkedIn profile here

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2 Comments

  1. Tenderskhoj February 10, 2020

    That’s really a smart move by Team Maruti ! Other companies focused in bringing in the change in technology as an advancement rather Maruti hold on to the fact that even CNG’s fells into the same Eco friendly zone as EV’s are, Hence it would not be a wise decision to just simply stick to CNG vehicles as it does have a huge demand in the market. !!

    (reply)
  2. manohar February 23, 2020

    It is like saying which will be the winner ? Petrol or diesel ? They co exist. EVs are far advanced in their developement and usage. Maruthi is giving up a potential leadership position in EVs in the near term. As a market leader they need to be in both.

    (reply)

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