If the company secures semiconductor chips on time and hits the target, then it will be the strongest growth recorded by India’s biggest automaker in more than a decade.
The company will launch new products at all price points, from its entry-level sedan to a premium crossover and mid-size sport utility vehicle (SUV), to regain market share and reach the objective.
Besides adding new models, Maruti Suzuki will leverage CNG offerings in its current portfolio to achieve further sales growth.
The maker of Baleno and Swift sedans is targeting 2.08 million production for FY23, several people with knowledge said. This is 26% more than the 1.65 million units shipped in FY22.
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The target production volume suggests the company is looking at an average production rate of 174,000 vehicles per month.
Contacted by ET, a Maruti Suzuki spokesperson said in an email that the company “cannot provide any guidance on future volumes or model launches.”
Suzuki has recorded a compound annual growth rate (CAGR) of 4% over the past decade. It was only in fiscal 2011 that the company was able to post a volume increase of more than 20%.
The depressed growth rate of the last 10 years was due to a series of disruptions – from the economic downturn to regulatory changes that raised the prices of entry-level cars, its mainstay, by 30% – particularly in the last three years.
A person familiar with the company’s thinking said the underlying demand was encouraging and gave it the confidence to prepare for production volumes of 2.08 million units, although achieving the goal depends on improving the supply of chips.
The company currently has an order book of 326,000 vehicles, representing nearly two months of sales volumes. Despite the improvement in production, the momentum in reservations is maintained.
Most order bookings were for the all-new Ertiga SUV crossover and Baleno sedan.
In April, Maruti Suzuki produced 157,392 vehicles. Its average monthly production over the past four months touched 162,862 units, according to stock exchange filings.
The company is aiming for double-digit production growth of its bread-and-butter models such as Wagon R, Swift, Baleno and
Brezza and expects future SUV models to bring additional volumes.
It has committed to a capital expenditure of over Rs 5,500 crore in FY23 which will go towards adding new capacity and model launches.
Maruti’s total installed capacity will reach 2.45 million units in FY23, including existing capacity at Gurugram, Manesar and its SMG plant in Gujarat, the addition of 250,000 units with the addition of plant C at SMG and 200,000 additional units at Toyota’s Bidadi plant. Maruti has a cross-badging agreement with Toyota.
Parent company Suzuki Motor Corp had recently announced production growth of at least 11% in India.