Suzuki’s India arm set to outperform its parent unit
The sales revenue gap between Suzuki Motor Corporation's Japan and India operations have narrowed to just US$600 million
Powered by robust sales, Suzuki Motor Corporation’s India unit is set to overtake its parent in Japan in terms of value and make India a bigger market for the Japanese carmaker.
According to financial daily Business Standard Suzuki’s Indian subsidiary, Maruti Suzuki, already sells more vehicles than its parent unit in Japan, and also enjoys a greater market capitalization.
Suzuki faces a declining market in Japan, whereas its Indian subsidiary is seeing a capacity constraint, leading to a waiting period of several months for some of its models.
India’s largest selling carmaker currently has two plants at Gurgaon and Manesar in Haryana with an existing capacity of 1.5 million vehicles. The third manufacturing unit in Mehsana, Gujarat is expected to begin production next year and add an annual capacity of 250,000 vehicles. This is expected to ease the waiting period for customers.
The sales revenue gap between Suzuki’s Japan and India operations narrowed down to US$600 million in the 2015-16 financial year from US$2.55 billion a year earlier.
During the two-year period, Suzuki’s Japan revenue grew 2% to US US$9.29 billion, while in India net sales went up 33% from US$6.55 billion to US$8.69 billion.
According to Maruti Suzuki‘s recent announcement it sold a total of 766,913 vehicles in H1 (April — Sept), a growth of 10.4%. Sales in the domestic market stood at 705,370 units, up 12.1% year on year, while exports were at 61,543 units. In the corresponding period Suzuki Japan sold 298,614 units and exports stood at 57,392 units.
Its new premium hatchback Baleno, launched in October, 2015, has passed cumulative domestic sales of 100,000 units this month and emerged as a leading player in the segment. Its mid-size sedan, Ciaz, (launched in October, 2014) passed the 100,000 cumulative sales mark in the domestic market in June.
Maruti Suzuki cornered 47.21% market share in India’s passenger vehicle segment for the period April to September, followed by Hyundai Motor India Ltd (a unit of South Korean carmaker Hyundai) with 16.77%.