Bhargava acknowledged Maruti Suzuki’s competitive disadvantage in the market for electric vehicles.
According to chairman R C Bhargava, Maruti Suzuki India Limited, the largest automaker in the nation, plans to invest 45,000 crore to quadruple its capacity to an additional two million cars by FY31. The change occurs a few months after the firm declared that by FY31, it would double its current production capacity of two million automobiles to four million cars.
“The age that lies ahead of us will be both very tough and quite unknown. We will have to spend close to $45,000 crores just to build these 2 million automobiles. Depending on how quickly inflation rises. As of right now, we calculate that 2 million cars will cost roughly 45,000 crores. We will need to increase the efforts we have been making in marketing and sales over the past eight or nine years. So, from the present 2 million to 4 million cars, we enhance our capacity to sell and service cars, says Bhargava.
The company intends to release more models of electric, hybrid, CNG (compressed natural gas), and ethanol-powered vehicles as it transitions into the competitive automotive market. By FY31, the company intends to introduce 10 new models, six of which will be electric cars. The business plans to introduce its first electric vehicle in FY25. Bhargava acknowledged Maruti Suzuki’s competitive disadvantage in the market for electric vehicles. “While we are launching EVs later than certain firms, that doesn’t mean we are entering the market after them. Upon our arrival in FY25,
will have negatively impacted our ability to gain a sufficient market share in any way. We carefully examined the environmental collective ratios in India, and the products that are now scheduled for production for FY25 will give us a competitive advantage, adds Bhargava, who also notes that the business is pursuing additional innovations.
Bhargava previously stated that by FY31, the company’s total sales will consist of 15-20% of electric vehicle (EV) models.
Bhargava claims that the company’s strength is in other technologies like ethanol, CNG, and powerful hybrids. “There are already two hybrid cars on the market. We dominate the market for CNG automobiles by a wide margin. Nobody else comes close to our market share of 25% to 30% for CNG. To comply with ethanol20 standards, our cars have been updated, claims Bhargava.
Bhargava continues, “The partnership between Toyota and Suzuki Japan allows us access to all types of innovative technologies, including areas in hybrids, hydrogen, and other areas.
Bhargava projects that by FY31, the company will have exported almost 8,000 000 automobiles. “We anticipate exporting 800,000 or so cars over the years 2030–31. Additionally, this order differs from the one we received today. To meet this demand, a significant amount of infrastructure and support services would be required, which will all require significant investment, according to Bhargava.
Bhargava asserts that Maruti Suzuki, with a P-E ratio of roughly 30, is the highest in the world. “Despite the cash reserve we have amassed, Maruti’s PE ratio is 30. Others are 12 or younger. In 2013–14, our PE ratio was 19. The increase is from 19 to 30. Therefore, stockholders have not suffered from cash accumulation, claims Bhargava.