Kenichi Ayukawa, Managing Director and Chief Executive Office, Maruti Suzuki
Maruti Suzuki has defied every small and big disruption in the domestic car market, growing at double-digit rates year after year. Kenichi Ayukawa, managing director and chief executive officer, speaks to Ajay Modi on the company’s performance, focus areas and growth plans. Edited excerpts:
What has worked for Maruti Suzuki over the years?
We have a long history in India. We were the first player here to set up a modern automobile industry over 35 years ago. We are very focused on the customer and their delight is the key for us. Accordingly, we try to develop our products keeping in mind the affordability of the masses. Quality is paramount and we keep pushing our suppliers to enhance their products. Each member of the company understands the significance of these elements.
Will it be challenging to meet growing expectations of stakeholders such as suppliers, dealers and shareholders in future?
Yes, it is quite challenging to meet the expectations of each stakeholder. There is a lot of opportunity for growth in the Indian automobile business. We try to challenge ourselves year after year to ensure that we keep improving while maintaining growth. I am sure we will take care of all stakeholders and develop the industry.
Will you have to change your approach given the disruption expected in the automobile industry?
Of course. We keep discussing the future and how we can get better. We need to evolve in line with customer expectations and market changes. That is very interesting and exciting for us. Indulging in new technology and product development is very encouraging. I want our people to enjoy what they do and innovate.
How is the focus on both premium products and the network helping the bottom line?
Big car prices are higher and so their margins are better. With their volumes on the rise it is certainly helping the financial performance. In order to provide such premium products we need to keep developing new capabilities. We have taken a challenge to satisfy customers through new products. Competitors are also planning similar segments. Our small-car philosophy continues and we will take care of small-car buyers. But we also need to meet the expectations of customers who want to upgrade.
Nowhere in the world does a single carmaker hold 50 per cent market. Your thoughts…
I don’t know about other markets. We will make efforts to keep expanding. Competition is good. If the competition comes up with a good product we try to challenge such products, we make efforts to compete. Competition helps in market development.
How instrumental has Suzuki Motor Corporation (SMC) been in the growth of Maruti Suzuki?
India’s contribution to SMC is becoming bigger and bigger. We try to further increase it. SMC realises the criticality of the Indian market. We have their support in product and market development, strategy and people development. We have regular communication about the Indian operations and market with SMC.
The regulatory environment for the auto industry is constantly changing. How do you address it?
The announced regulatory changes have to be complied with through development of technology. We have to proactively do it, keeping in mind environmental concerns, and reduce fuel consumption. It is challenging but we have to. Otherwise, we cannot survive.
Maruti Suzuki sits on cash reserves of over Rs 300 billion. How do you plan to use it efficiently?
The utilisation of this money is very important. The areas of investment will be product and technology development, and expansion of the sales/service network. A lot of new areas have emerged, including electric cars. We have to prepare for such future changes and investment will be needed. We will also have to expand our production facility for future demand. We will have a capacity to make 2.25 million cars every year by 2020.
There are challenges in the form of raw material prices and discounts. Do you see these two factors playing a role?
Globally, raw material prices have been going up and that is a trend that may continue into next year. We have to live with it and try to control costs through volume expansion and improve our productivity.
Players like M&M and Ford have made investments in the shared mobility space. Does your company find that interesting?
We have to study this. We will look at collaborating with these new players. We are open to discussions.
How critical is it to keep expanding your dealer network?
A dealer has to be closer to the customer. We have 3,300 outlets now…We expect it to go up to 5,000, 10,000 and 30,000 in future. Even the Himalayas should have our dealership. That is my dream.