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Maruti Suzuki Reports 12% Sales Growth, Utility Vehicles Growth At 98%

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Maruti Suzuki reported sales of 135,550 units in November, 2016 against 120,824 units during the same time last year resulting in a growth of 12.2%
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  • Sales of 105 units of its light commercial vehicle – Super Carry against 268 units last year.
  • Sales of SUV driven by Brezza demand almost doubled from 8,688 units to 17,215 units.
  • Domestic Sales stood at 1.26 lakh units against 1.10 lakh units
  • Exports were down by 1,000 units to 9,225 units resulting in a drop of 9.8%

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MSIL or Maruti Suzuki India Limited is believed to have accelerated its Gujarat plant (aimed to make the plant as the most evolved plant of Suzuki Global) with which is scheduled to start production (first assembly line will likely produce 250,000 units) in early 2017 with a second assembly line (another 250,000 units) which would be commissioned by 2019.
The Project will have a final capacity of 1,500,000 units (Maruti’s both Manesar & Gurgaon facility have a combined annual production capacity of 1,550,000 units) at a total investment of about Rs.18,500 crore (all the funding for this project comes from Convertible Bonds worth ¥ 200 Billion). In a press release on 18-Nov, Suzuki has decided to invest an additional Rs. 2,600 crore. The capital increase has been attributed to fund capital expenditure for facilities of SMG’s second assembly plant and engine/transmission plant which Suzuki plans to start in 2019 to prepare for the future growth of Indian automobile market and for the expansion of exports from India. With this, Suzuki’s total investments in Suzuki Motor Gujarat will increase to Rs. 5,800 crore.
The bulk of additional production would not be premium cars and would not be sold through premium channel – clearly signifying that the products will be the Multi Utility Vehicle – Super Carry (Produced at Gurgaon Plant), Baleno, Brezza and the new to be launched Micro SUV – Ignis. (MSIL has set a target of selling 20 lakh units annually by 2020).
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2 plants i.e. Hansalpur (5.15 lakh sq. mtr) which had its foundation ceremony on 28-Jan-15 and Sitapur (26,204 sq. mtr) sites can each have a production capacity of 750,000 units a year. The location of the new plant is suited for Maruti Suzuki’s production and export hub (Maruti is expected to save Rs. 185 crore in transportation costs alone or Rs. 4,000/- per car) with approximately 300km away from the Mundra port, a major exporting port in Gujarat (Vehicles and parts will be supplied only to Maruti Suzuki India and distributed through MSIL’s sales network).
Media reports confirm that trial runs have been running successfully at the Gujarat plant including commissioning of the first unit. A company spokesperson stated that other than Baleno other models were yet to be finalised for production at the plant.
MSIL is not stopping at this. The company recently announced that it will setup an Industrial Training Institute in Mehsana, Gujarat. Suzuki is planning to setup the “Japan-India Institute of Manufacturing (JIM)” Institute which will go live in August, 2017. It will provide training to over 300 youths in technical trades and Japanese shopfloor practices. Technical Courses include Fitter, Electrician, Welder, Mechanic Diesel, Mechanic Motor Vehicle, Mechanic Auto Body Repair and Mechanic Auto Body Painting.
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MSIL also unveiled the “Wagon R Felicity” limited edition. The celebration edition is equipped with PU seats and steering cover, body graphics and a rear spoiler to make it even more attractive. Economic Times has reported that MSIL has stopped production of Ritz to as it prepares to launch the Ignis which was due to launch during the festivities this year.
Kaushik Madhavan, Director – Automotive & Transportation, MENASA at Frost & Sullivan said:

There are primarily 2 areas of benefit as a result of stopping Ritz production.
  1. This will help MSIL shift production capacity towards new models which are in higher demand, like Brezza, Baleno and so on.
  2. Focusing on Ignis will give MSIL the opportunity to prepare towards the impending BS VI, India NCAP and CAFE regulations. MSIL can bring in more modern, efficient and safety compliant technologies.

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