In order to counter the slowdown in the demand for passenger cars, firms are developing new strategies. Following the same trend, Maruti Suzuki, the country's largest passenger car maker, has also decided to enter the Light Commercial Vehicle (LCV) segment. Interestingly, about three decades ago, a similar proposition was shelved by the company when it began operations. Maruti Udyog Limited entered the Indian market in 1983 by opening bookings for the M800 model and Carry LCV.
R C Bhargava, the Chairman of Maruti Suzuki India Limited, recalling that period, said, “While the M800 received 1.21 lakh bookings, the Carry had only about 2,000. Then we had decided to drop the plans for launching the LCV."
This is being seen as a smart move by industry experts, who expect Maruti Suzuki to carry its reputation and goodwill to lure customers in this segment, as well. Expected to hit markets in a couple of years, the Maruti Suzuki LCV will provide stiff competition to the Tata Ace, which has been the leading vehicle in this segment. Experts believe that the Indian LCV will be based on the Carry, which is a Suzuki Motor Corporation's vehicle available for sale in markets like Pakistan, China and Indonesia.
Bhargava, said in a recent interview, “It was planned in our original agreement (with SMC) in 1982 that the Carry LCV would be launched in India but at that time, due to poor response from the market, it was shelved. Now the situation has changed and the board has given approval to go ahead for launching the LCV in India. Our engineers are working on adapting the diesel engine that we have licensed from Fiat to be used in the LCV. This will be a pure goods carrier.”
He further added, "In the last two years, we have seen a demand for such LCVs growing in India and we think we can offer a superior product in the segment as Suzuki has been doing for years globally."
No name has been finalised yet by the company for the new vehicle, which will be available in both CNG and diesel versions. The company official further said that Maruti Suzuki's intentions of entering the LCV segment were based on more than one premise. According to him, the company wants to diversify its portfolio by expanding the vehicle range and hopes to cash on its trusted brand name. Also, he suggested that this is a method of protecting the firm from risks that have engulfed due to the slowdown being witnessed by the passenger car market.
Sources close to the company have said that the diesel engine of the LCV will be manufactured in India. However, Maruti Suzuki has not selected a particular plant where the upcoming model will be produced. Currently, Maruti Suzuki is engaged in the development of a third production facility (located in Gujarat), which is expected to come as operational by 2015-2016. It must be noted that there is no definitive strategy for the sale of upcoming LCV in terms of exclusivity of showrooms.
Speaking on the same, Mayank Pareek, Chief Operating Officer (Marketing and Sales) for Maruti Suzuki India, said, "We have not yet decided the strategy for it but in markets like China, Indonesia and Pakistan, Suzuki has both mixed and exclusive showrooms for the Carry.”