Maruti Suzuki lines up Rs 5,000 crore capex for current fiscal

The country’s leading carmaker, which had earmarked around Rs 4,500 crore during FY22, also believes that the parent company Suzuki Motor Corp’s investment in Gujarat would help expand its range of battery electric vehicles (BEV) in the country.

“Capex at 5,000 crore Rs is something we have committed to this budget on various projects, including the launch of new models etc,” said MSI CFO Ajay Seth in an analyst interview.

The manufacturer of Alto and Swift noted that it would manage the capital through internal accruals, he added.

In response to a question about Suzuki’s plans to invest in Gujarat for local production of electric vehicle (BEV) and BEV batteries, Seth said:

“This investment will greatly support the localization of EV manufacturing and help the company accelerate and expand its BEV product portfolio in India.”

The company plans to introduce its first BEV by 2025.

In March, Suzuki Motor Corporation announced to invest about 150 billion yen (about 10,445 crore Rs) by 2026, for local manufacturing of electric batteries (BEV) and BEV batteries in Gujarat.

When asked about the ongoing semiconductor shortage and its impact on the company, Seth noted that the delivery situation for electronic components remains unpredictable.

“It may have some impact on production volumes for the financial year 2022-2023 as well,” he added.

MSI currently has a backlog of over 3.2 lakh units due to production problems following an acute shortage of chips.
“In general, chips will continue to be a challenge this year as well, and of course we will try to maximize our number,” said MSI Executive Director Corporate Affairs Rahul Bharti.

On a question about hybrids, he noted that the technology is very powerful that can work with electric cars to reduce coal and oil imports.

“They do about 30-40 percent of the work for an electric car and are many times more scalable. That would be an interesting option and we will look forward to such technologies in the future,” says Bharti.

He noted that the company would like to regain over 50 percent market share in the domestic passenger car segment.

“As a market leader, our goal will of course be to have a 50 percent market share or more. There are a number of factors that are responsible for this, a semiconductor shortage, with the three lakhs waiting for orders if we serve that the numbers and market share would be much higher , says Bharti.

He noted that the company’s market share in the non-SUV segment is over 65 percent.

“In all segments other than SUVs, our market share has increased. Whenever we launch SUVs, the market share must of course improve,” said Bharti. The company plans to launch more products to consolidate its position in the fast-growing SUV segment.

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