In addition to domestic market, Maruti has shown gains in exports as well in Q1 FY2023-24
Aided by new cars such as Fronx, Jimny, Invicto and Grand Vitara, Maruti Suzuki India Ltd (MSIL) has been able to register strong growth during the quarter ending June 30th, 2023. The company expects demand for its cars to increase even more in coming years. To meet the increased demand, Maruti is working to almost double the production capacity to 4 million cars per annum by 2030-31.
Maruti continues to be the largest exporter of passenger vehicles from India. In Q1, around 63,000 units were exported. Maruti’s export portfolio has been expanded to include Fronx. It is being shipped to destinations such as Latin America, Middle East and Africa.
Maruti Q1, 2023-24 highlights
In terms of passenger vehicle wholesales, Maruti has registered growth of 12.2% in Q1, 2023-24. This is faster than the industry average. Total sales have increased from 467,931 units in Q1 last year to 498,030 units in Q1, 2023-24. Profit (PAT) has increased from Rs 10,128 million to Rs 24,851 million, marking an increase of 145%.
Maruti’s SUV market share has increased to around 20%. This has been made possible with contributions from new SUVs such as Grand Vitara. Maruti has also launched its new flagship Invicto, which is available at a starting price of Rs 24.79 lakh. Maruti’s focus on portfolio expansion seems to be yielding the desired results.
Another reason for Maruti commanding close to half of passenger vehicle segment is its wide dealer network. In Q1, 2023-24, the company expanded its network to reach a total of more than 4,500 touchpoints. Maruti is also working to reduce its carbon footprint. In that context, Maruti has registered sales of more than 113,000 units of CNG vehicles. This is the highest ever quarterly CNG sales for the company. CNG penetration has increased to around 27%.
Maruti’s shipments through the railways were more than 1 lakh units during Q1. It makes around 22% of the overall dispatches. Maruti is also increasing the use of renewable energy sources. The company will be setting up two new solar plants with a capacity of ~22 MWp by FY’25. With that, total installed solar power capacity will increase to around 48 MWp.
Maruti to acquire shares of SMG from SMC
With ever increasing scale and complexity of operations involving multiple powertrains, the Board of Directors of MSIL have decided to bring all production related activities within the control of a single entity. Towards that end, MSIL will be acquiring shares of Suzuki Motor Gujarat Pvt Ltd (SMG) from Suzuki Motor Corporation (SMC). This will mark the end of the contract manufacturing agreement that is currently in place.
The acquisition will be carried out in accordance with the regulatory framework and minority shareholders’ approval. How the acquisition will be executed and the amount to be paid to SMC will be finalized in a subsequent board meeting. This acquisition is purely aimed at strengthening business fundamentals. It will not have any negative impact on end users.
