Maruti Suzuki's future plans include segment diversification

Tuesday 30 July 2013, 11:42 AM by

Maruti Suzuki, for a long period of time, has been dominating the Indian car market. However, the competition, for India's leading passenger car maker, has stiffened over the years with the entry of many foreign firms. According to sources, the firm has devised several strategies in terms of diversification, cementing its stronghold and improving the growth rate. The auto maker has plans of entering other segments in order to counter the slowdown in the passenger car market.

Maruti Suzuki
Maruti Suzuki's future plans include segment diversification

Industry experts believe that this is a smart move by the Indian auto giant and is likely to prove beneficial in the long run. In past years, the Indian car market has become increasingly competitive with almost all prominent global auto firms operating in the country. Rivals like Honda, Hyundai and Volkswagen have been making efforts to increase its share in the passenger car market. However, Maruti Suzuki still holds an advantage in terms of sales and servicing.

Maruti Suzuki primarily manufactures cars powered by the petrol engines, but the 1.3-litre engine used in Swift hatchback and Swift DZire compact sedan has enjoyed a high level of success. Owing to this, analysts feel that it is likely to work on developing diesel-based vehicles as it makes a foray into other segments. It is also believed that there would be a requirement of investments for developing the same. Despite strong speculations, no official confirmation has been made by the manufacturer regarding investment.

Despite the dominance of Maruti Suzuki, the firm has not experienced growth in domestic sales in the past few years. Statistics reveal that the company has maintained a market share mark around 40 per cent in the recent past. Sources close to the company claim that the Maruti Suzuki is working aggressively on the development of new compact cars. Reports from analysts suggest that the largest passenger car maker of the country should hit a figure in excess of 1.6 million by the year 2016.

Apart from the slowdown, Maruti Suzuki has been bogged down by a many conflicts with its workforce. Several incidents have contributed to the growingly strenuous relationship between the management and workforce, leading to legal implications and violence. One instance that immediately comes to mind is the ongoing issue at the Manesar plant. The worker-management relationship at the Manesar plant has been in a turmoil, which has led to several disruptions in production and incidents of violence.

Although the current economic crisis is something that Maruti Suzuki can not control, it is required to devise strategies to counter obstacles. The Indian firm has been working on the same by offering discounts, lowering cost and introducing new models. Sources close to company feel that in order to battle the economic crisis and demand slowdown, the auto industry needs the support of government, in order to overturn the problems.

In a recent development, Maruti Suzuki has officially announced its entry into the light commercial vehicle segment. It is believed that this segment has a lot of scope and can accommodate the entry of new manufacturers.

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