Maruti Suzuki Says Understanding Consumer Perspective Is Key To EV Success

Interaction Maruti Suzuki Understanding Consumer Perspective Key Electric Vehicles Success
Maruti Suzuki Says Understanding Consumer Perspective Is Key To EV Success

In December every year, the senior management at the country’s largest carmaker – Maruti Suzuki India Ltd – meet the media for a ‘year-end’ press conference. This year, the conversations primarily hovered around the subject of electric vehicles, and the company’s preparedness in meeting the government’s 2030 go-all-electric mandate. To begin with, the company has decided to commission a market survey to understand customers’ expectations from EVs.

It must be noted here that on November 17 last year, Suzuki and Toyota had announced that they will co-develop EVs for India, with their first car expected to roll out around 2020. In a statement then, the two companies had said that Suzuki, specifically, is to produce EVs for the Indian market and will supply some to Toyota, while Toyota is to provide technical support. While this may seem ambitious, the partnership between the two large Japanese manufacturers augurs well for India’s electromobility strategy.

MSIL’s foray into the EV domain wasn’t too clear until the partnership was announced. However, it was only a matter of time before the largest carmaker in the country made its first move. While a lot is being said and projected about the industry’s shift to electric vehicles over the next 12 years (until 2030) and beyond, Dr RC Bhargava, Chairman, MSIL is clear that EVs won’t succeed unless they are in line with customer expectations.

“So far, nobody has any idea about what the customers think of electric vehicles. We know what the government thinks, we know what the media thinks and we know what the experts think,” said Bhargava in a tongue-in-cheek statement. The vehicle must be what the customer expects and it should be affordable to him. Both these criteria have to be met for EVs to be viable, said the octogenarian.

The company had initiated a similar market survey before it had first developing the Maruti 800, MSIL’s first product in the Indian market. The market survey for EVs will be launched in January 2018, and will be completed over a period of five to six weeks. The annual press meet was also attended by Kenichi Ayukawa, Managing Director; RS Kalsi, Sr Executive Director (Marketing & Sales) and CV Raman, Sr Executive Director (R&D).

The current market dynamics do not favour launch of electric vehicles. From a price perspective alone, EVs today are priced at almost double the price of conventional petrol-powered cars. Then, there are other pertinent issues such as charging infrastructure. Bhargava harped on the need to work out policies and incentives clearly, because making an affordable small car for the Indian market is very different than making a large affordable e-car for European or North American consumers.

FOCUS ON BATTERIES

Maruti Suzuki’s EV strategy will also get a massive boost, thanks to its parent Suzuki Motor Corp’s JV with Toshiba and Denso to produce lithium-ion batteries. In September 2017, the company had announced it will be setting up India’s first lithium-ion battery production facility in a supplier park close to its new production facility in Hansalpur, Gujarat. This plant, which will make batteries for India and international markets, is likely to be operational by 2020. An investment of $ 180 mn (around ` 1,150 cr) has been lined up for the battery unit. For the record, Suzuki holds 50 % share in the JV, while Toshiba and Denso holds 40 and 10 % shares respectively.

Although the cost of batteries has come down in the past few years, they remain the most expensive component of an EV. In that context, local production of batteries should give MSIL a distinct advantage over other competitors in the market, which – at least until now – are dependent on imports.

It is imperative for car makers to increase usage of locally-sourced components for electric vehicles, Bhargava said; else it won’t be feasible to import so many batteries. The government’s “Make in India” campaign will fail if batteries and electric motors are not manufactured here, he said.

ROUND-UP

India is pursuing an aggressive plan towards electromobility, but being a later starter in this game, India needs to do a lot more. The government and industry needs to commit to more investments in developing an ecosystem that supports the growth of the EV market. China, for example, has started to dominate the battery market, which was once led by Japanese and South Korean manufacturers. It is also poised to become the first country outside Europe and the US to roll out a massive charging network for EVs.

On its part, Maruti Suzuki also plans to set up charging stations, once it starts selling its EV in India. Bhargava, however, expressed doubt whether the country would have enough charging infrastructure in the country by then.

The next couple of years are going to be critical to India’s push towards EVs. There are other automakers developing EV capabilities in India, and collectively, they are expected to give the EV mobility in the country a significant drive. And Maruti Suzuki seems set to be a flag bearer in this movement as well.

TEXT: Deepangshu Dev Sarmah