Maruti Suzuki to Continue Focus on Small Cars Even with Demand Setbacks, Confirms RC Bhargava

Maruti Suzuki is the leading car manufacturer of India. It always remains committed to its strategy of producing at low-cost, small cars, even if demand slows down. Chairman RC Bhargava also said these things. He was speaking at Maruti’s 43rd Annual General Meeting on August 27, Bhargava emphasized the importance of small cars in the Indian market, given the country’s economic and social conditions.

Bhargava said, “We strongly believe that low-cost, small cars are essential for our market. A temporary dip in demand will not alter our strategy”. 

Maruti’s Record-Breaking Year and Dividend

The chairperson also shed light on the achievements of Maruti Suzuki. Bhargava highlighted that FY24 has been the most successful year in the company’s history. To mark this milestone, Maruti has proposed a record dividend of ₹125 per share.

Maruti Suzuki will launch its first electric vehicle soon. The company aims to export 20% of its total production of 4 million vehicles by 2030.

Bhargava reiterated the company’s commitment to reducing fuel costs and emissions through hybrid vehicles. While acknowledging that EV adoption will take time, he stressed the importance of making all vehicles cleaner during the transition period. “We are betting big on hybrids as EVs will be gradually adopted over the years,” Bhargava said.

Maruti Suzuki is working to grow its reach in towns and rural areas. During today’s talk, Bhargava assured investors that this expansion would ensure that the benefits of Maruti’s offerings are accessible to people beyond large urban centers.

Bhargava mentioned a slight delay in finalizing the location for the one million unit expansion but expressed confidence that a decision would be made soon. Then he will expand branch locations also. 

Addressing Inventory Challenges

To address the current vehicle stockpile, Bhargava assured that Maruti Suzuki is actively working to clear inventory by the upcoming festive season. The company’s stock levels have historically remained between 38-40 days, and Maruti is taking corrective measures to maintain this standard.

This comes in response to a statement from the Federation of Automobile Dealers Associations (FADA), which reported an increase in vehicle inventory levels from 65-67 days in early July to 70-75 days in August, with over ₹73,000 crore worth of pending vehicles.

Maruti Suzuki has proposed the appointment of two new independent directors both are women. This is aimed to promote gender inequality, but the approval is pending in front of shareholders. After this change total number of women directors on Maruti’s Board will be three. This reflects the company’s commitment to diversity and inclusion.