Maruti working on greater flexibility across its plants, TK247

Maruti Suzuki is making its plants extra flexible so that their production lines can manufacture more models, its top management told analysts in a recent Q&A session following the fourth quarter results. The transcript has since been uploaded on the company’s website.

‘In terms of production planning, increasingly we are making our plants more flexible. We are also taking care that the newer lines that are established can manufacture electric vehicles also,’ said the company representatives.

EVs are ‘far heavier’ because of the battery weight and the body strength to handle that weight. Consequently, there is ‘some difference’ in the production line on that account.

‘But we are making it flexible, whether it is in Gujarat or Kharkhoda. The utilisation is something that we have to closely watch as well as the operating leverage associated with it. That is something we will be watchful of,’ said the management.

Common sourcing

Sourcing of components is also common for all the plants whether they are ‘used in Gujarat or Haryana or within Haryana, whichever plant’. So, economies of scale benefit the company eventually even while it is a given that profits on EVs will take time in coming since this is still a nascent industry.

‘We have to be conscious that by design EVs will have a much lower profitability and that is true for the entire industry.’Maruti Suzuki Management

‘We have to be conscious that by design EVs will have a much lower profitability and that is true for the entire industry. We cannot expect EVs to have the same level of profitability as internal combustion engines,’ they explained. Had this been the case, the Centre ‘probably does not need’ to have a 5 per cent GST or so many schemes or so many support policies for EVs. Hence, said the management, it was important for Maruti to be conscious of this reality.

‘Having said that, our efforts on decarbonisation will be through multiple technologies and we will try to leverage all possible technologies to reduce carbon to supplement our EV efforts,’ they reiterated.

Hybrids on a roll

The company spokespersons at the analysts session said there was every reason to be pleased with the sales of hybrids and their penetration where some geographies in India are doing better than others for ‘obvious reasons’. Terming it ‘an excellent technology’, they added that customer response had been very good.Maruti had also also introduced ‘high voltage courses’ in industrial training institutes so that the serviceability of such vehicles ‘remains high and customers always have a reason to feel happy’.

The company was now hoping to see a positive push from all three stakeholders — customers, policymakers and industry — towards the cause of hybrids. Interestingly, Japanese automakers are batting hard for hybrids even while homegrown Indian companies like Tata and Mahindra support electric.

Also read: Maruti Suzuki bets on exports, new SUV launch to drive sales in FY26

Maruti also mentioned at the analysts Q&A session that it was expecting some kind of finalisation of CAFE-III (corporate average fuel efficiency) norms soon where automakers are in talks with the Ministry of Power and Bureau of Energy Efficiency.

‘They have gone into great details and we are expecting the policy to come out in about a month or two,’ said the management. When this happens, it will be a further tightening of carbon dioxide emissions.

Many more levers

On the subject of margins, it was pointed out that Maruti Suzuki has ‘far many more levers’ than any other car manufacturer in the country to handle any kind of headwinds or any kind of impact on margins.

‘Entry level cars are just not growing and we have to be conscious of that fact. India will have to take a call sometime on how to address this (reality) if manufacturing has to grow,’Maruti Suzuki Management

‘So, if you compare it with other companies, in their best of times and Maruti’s lowest of times, we are probably doing better than others. So, we have to keep that in mind,’ said the management. One phenomenon that had to be factored in was that overall demand for its cars was not growing with nearly 90 per centof the country not participating in the automobile growth story.

‘That is because entry level cars are just not growing and we have to be conscious of that fact. India will have to take a call sometime on how to address this (reality) if manufacturing has to grow,’ they said. The good news is that exports have more than made up for the lacklustre showing in the domestic market.

The company continued to be the top exporter of passenger vehicles for the fourth consecutive year and surpassed the milestone of three million units of cumulative exports during the year. ‘We hope to continue the momentum in exports in FY’26 as well and grow by at least 20 per cent,’ elaborated the management.

Also read: Auto industry to record muted growth until buyer-friendly policies are introduced: Maruti Suzuki’s RC Bhargava

Better economies of scale

In Q4, nearly one in every two cars exported from the country was from Maruti Suzuki and its share during this period was around 48.4 per cent share of India’s total passenger vehicle exports. Exports will ‘obviously help us a bit’ as compared to a standalone domestic scenario, because the company will get better economies of scale and some pricing power in some markets.

‘When domestic growth is at very low levels, exports have cushioned the decline and we hope to grow them in a healthy manner in the future and also in the medium term. Similarly, we have levers on decarbonisation and our cost of carbon reduction should be lower than others,’ said the management.

As for the present levels of global volatility triggered by the US on tariffs (even while their imposition has been put on hold for a few months longer), Maruti believes it is very difficult to predict the way everything associated with this levy is going.

‘But one thing that we have to watch out for is the supply chain for rare earths elements and we will keep a close watch on that. So far, by and large, things remain stable. But it is a dynamic situation as all of us know,’ stated the representatives.