Rs. 30,000 Crore to Be Invested to Sell 30 Lakh Maruti Cars per Year

Commenting on their new plan, Maruti Suzuki India, Chairman, R C Bharghav said, "I see Maruti investing money in R&D, in building and all the required infrastructure for selling larger and larger volume of cars because if we are to sell 3 million cars we have to double this entire infrastructure." As for how long will it take the company to reach its 30 Lakh units per year target, Mr. Bharghav said, "Maybe 8, 9 or 10 years. I really don't know. It will depend on the market conditions."

Talking about the infrastructure that Maruti will need to achieve that target, Bharghav said, "The cost today, when we start doubling this infrastructure from 2016 is going to be much much higher and that figure which we have estimated could be something close to Rs. 25,000 crore to Rs. 30,000 crore,"

The entire infrastructure that Maruti Suzuki has created since 1983, sums up around Rs. 11,000 crore. Moreover the company currently has around 1,700 dealerships across the country and has also set up an R&D centre at Rohtak in Haryana. With this same infrastructure Maruti cannot sell 30 lakh cars per year, so the company needs to invest in creating that infrastructure, he added. The current infrastructure has a production capacity of 1.5 million with its two manufacturing sites in Gurgaon and Manesar.

Talking about the lifecycle of a model in the Indian car market, Mr. Bharghav said, "The average life of a model these days is six years. A product is required to be replaced every six years. Every three years a model needs to refreshed or minor changes. So today we have 14-15 models, one sixth of them will be replaced every year and another one sixth would be refreshed every year."

Sharing his views on the recent ban on registration of diesel SUVs above 2000cc in Delhi, Mr. Bharghav said, "Some companies have invested large amount of money in diesel cars. Somebody has to consider what happens to these people. They have shareholders. They will get badly affected. It is not only Mahindra, Tata or Ford who will get impacted. There are lot of shareholders who get affected. Somebody will have to think about them also." Commenting on Maruti's future plans for diesel cars, Bharghav said, "I don't know what the policy is going to be. I have to react to the market. If I know what is going to happen in the next six months, I can tell you."