Maruti Suzuki setting up 100,000-unit line for LCV Super Carry

Factory's total output to be cut by a third this year

Maruti Suzuki aims to dedicate a capacity of up to 100,000 at its Gurgaon plant to a new light commercial vehicle (LCV). Likely to be called the ‘Super Carry’, the LCV will be launched in the April-June quarter.

The move comes even as the country’s largest carmaker reduces capacity at its Gurgaon plant — to 600,000 vehicles a year from a peak of 900,000 in 2010-11 — as part of a plan to de-congest the unit and refocus it as an engine assembly.

RC Bhargava, Maruti chairman, told Business Standard in an interview that the LCV would see a “limited launch” in the April-June quarter this year because the market was weak. Sales through a new network of dedicated dealerships are expected to expand across the country only from the end of the year. “The LCV project is on schedule, it comes every quarter to the board. The LCV market in India is very weak at the moment, so making a big show of it doesn’t make sense. We will have fewer dealerships. (Production) can go up to 1 lakh, but initial production will be much lower,” he said.

Industry sources said the Super Carry would first be launched with an 800 cc diesel engine, and a CNG variant powered by a 1.2 litre engine next year. For the first year, Maruti has provided a production target of 80,000 LCVs to suppliers, which indicates a monthly volume of nearly 7,000.

Led by Tata Motors’ Ace family and Mahindra’s Maxximo, the LCV market sold 3,90,636 vehicles in 2014. Sales are down 17.25 per cent from 2013 as the economy slowed and consumer confidence ebbed. LCVs are largely used for intra-city transport as last-mile connectivity, while passenger variants are popular in small towns and the countryside.

Maruti, after reducing capacity at the Gurgaon plant, will have an annual output of 1.35 million cars with the majority coming from its second plant in Manesar, which also has three production lines. “Out of three lines in Gurgaon, one is being reduced to set up the plant for 800 cc diesel engines,” Bhargava said. More production capacity will become available from mid-2017, when the first line at Maruti’s new Gujarat facility starts operations and adds a further 250,000 units a year. At full capacity Gujarat will produce 1.5 million vehicles a year across six production lines, overtaking Maruti’s current base in Haryana.

Gaurav Vangaal, senior analyst for light vehicle forecasting at IHS Automotive said, “The LCV segment is a different ball game altogether and a new entrant like Maruti should be cautious as the segment has been subdued for two years now. Even established products like the Tata Ace and Mahindra Maxximo are struggling to maintain steady volumes.”