Maruti looks beyond cars to de-risk biz, LCVs on agenda

Jul 28 2013, 04:44 IST
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SummaryAmid a slowdown in car sales, Maruti Suzuki India said on Saturday it will foray into the light commercial vehicles segment, 30 years after an initial plan was shelved when the company started operations.

Amid a slowdown in car sales, Maruti Suzuki India said on Saturday it will foray into the light commercial vehicles segment, 30 years after an initial plan was shelved when the company started operations.

The company plans to challenge Tata Motors’ top-selling light commercial vehicle (LCV) Ace as part of the strategy, which will see India’s largest car maker diversifying and de-risking its business from the passenger vehicle segment.

Based on parent Suzuki Motor Corp’s ‘Carry’ platform, a new LCV model is being developed for launch in India by 2015-16, which will offer both diesel and CNG engine options and also target export markets.

Maruti chairman RC Bhargava said the company’s board has approved making of an LCV aimed at goods transport, though details on pricing and sales network is yet to be finalised. “We thought that if there is a market for it and we have a product, why don’t we get it. My car segment will grow, so why not grow another segment; in a sense it’s both de-risking and expansion of the range. I think the Maruti brand is strong enough, so any motor vehicle format the company forays into will have good acceptance,” Bhargava said.

Parent Suzuki Motor, which has a 56.21% share in Maruti, already sells variants of the Carry LCV in markets like Indonesia, China and Pakistan.

In fact, Maruti had previously tried to market the product in 1982 when the company started operations. It had taken orders for both the 800 and the Carry, but then stopped short of launching the model because of low demand.

“The Carry was part of the original licence agreement for India, but while we got orders for over 1 lakh units of the 800, only 2,000 units of the Carry were booked. That made it unviable then, and in 1983 we gave up plans to make it. But in the past few years, we have got into the diesel market, so we decided to bring this vehicle back into our portfolio,” Bhargava said.

Among rivals is the Tata Ace, which sold over 3.25 lakh units (with variants) in FY13, apart from Mahindra’s Maxximo and Ashok Leyland’s Dost. The LCV segment has been the major driver for the commercial vehicle industry in the past two years, as heavy truck sales remain sluggish and major cities ban larger goods vehicle to ply on roads during the day.

The move to expand into newer

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