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Maruti earmarks 40% capex for product development

The logo of Maruti Suzuki India Limited is seen on a glass door at a showroom in New Delhi

The logo of Maruti Suzuki India Limited is seen on a glass door at a showroom in New Delhi

 

  In a move to strengthen its research & development (R&D), India’s largest car maker Maruti Suzuki India (MSIL) plans to use 40 per cent of its proposed capex of Rs 4,400 crore for the current financial year for new product development. Part of the investment will go towards the new, Rs 2,000-crore R&D and testing centre at Rohtak in Haryana. The capex in 2015-16 was Rs 2,400 crore.

EVOLVING ITSELF MSIL started its journey of in-house engineering capability and model development in 2000 From 2003, MSIL started training its engineers at Suzuki Motor Corporation From 2008, MSIL started working on full model changes of its Alto, launched in India in 2012 To enhance its capability in testing company setting up a new R&D and test track in Haryana at a cost of Rs 2,000 cr
In a recent conference call to investors, the company said some of the projects had been deferred to the next year.

C V Raman, executive director (engineering) at MSIL, said the Rohtak centre would help the firm scale up. MSIL will continue to support Suzuki Motor Corporation (SMC) in manufacturing global models. The facility is expected to be ready in the next two years.

Raman added that the R&D centre in India had evolved itself in end-to-end development. MSIL and SMC complement each other’s capability in R&D.

Suzuki would introduce 20 new models by 2020 and at least 15 of them would be in India, said Raman, adding that this would be over and above the existing model refreshments and upgrades.

MSIL started in-house engineering and model development in 2000 with the development of facelift models such as Zen, Alto, WagonR and Omni, with the support of parent SMC.

In 2003, MSIL started training its engineers at SMC and initiated co-design work with SMC for design and development of global model Swift. Since 2008, MSIL has been working on full model changes of its existing line-up product Alto, which was launched in India in 2012. It acquired the capability to do full-body change by working on this project.

MSIL started working along with SMC from 2010 on global models such as Baleno, Ciaz and S Cross, which were recently launched in India. It also started work on Vitara Brezza as the first model to be designed and developed with MSIL as lead for development, in parallel with other global model development work plan with SMC.

With the Rohtak R&D centre, the company will be able to fast-track model development, testing and validation, thereby bringing refreshments at a much faster pace.

MSIL has been sending 30-40 vehicles to Japan for testing. Now, those will happen here, said Raman. MSIL also plans to sell two million units per annum by 2020.

According to Raman, R&D in India has, over the years, progressed and these now play a major role in product development. In future, the product itself might be developed by the centres in India, he said. For this, however, the company needs to do a lot of application engineering works. Raman said there is a dearth of engineers and that’s a challenge for the industry.