NEW DELHI: Maruti Suzuki is open to forming partnerships with auto part makers to secure its future supply chain and maintain its leadership position, the chairman of India’s top-selling carmaker said in an interview.
Partnering with suppliers in its early years contributed significantly to Maruti’s success in India, where it has 43 per cent share of the car market, and also helped establish a supply chain for combustion engine cars, R C Bhargava told Reuters.
With growing demand for more technology in cars and a shift to ‘greener’ powertrains like electric and hybrid, automotive supply chains globally are changing and need large investments to keep pace.
“If required somewhere, we will get into a joint venture,” said Bhargava, when asked what role Maruti would play in setting up and securing its future supply chain.
The company, though, is yet to identify specific areas for an alliance, he said.
“We have done it in the past. Maruti built a very strong supply chain because we partnered vendors and have been working with them,” he said, adding that it has about 20 joint ventures with its suppliers.
Majority-owned by Japan’s Suzuki Motor Corporation, Maruti dominates India’s car market with its small, low-cost vehicles. But the company faces growing competition as buyers shift to bigger cars like sports-utility vehicles (SUVs) and regulators demand more safety features, pushing up costs.
Maruti is expanding its portfolio and adding more SUVs but it is behind rivals which has resulted in its market share falling to 43pc from more than 50pc two years ago.
Even so, the potential for small cars in India is huge, said Bhargava. Millions of people still ride motorcycles and scooters because they cannot afford a car despite its better safety profile. Once incomes rise, they will upgrade starting with small, affordable cars, he said.
Published in Dawn, August 28th, 2022