Takeuchi appointed as new captain of Maruti Suzuki amid multiple challenges

The leadership change comes at a moment, when Maruti is facing challenges from new emission norms, EV and increased competition from rivals

India’s largest carmaker Maruti Suzuki on Thursday announced leadership change at the top with Hisashi Takeuchi as the new Managing Director and CEO from next month.

Current MD & CEO Kenichi Ayukawa will end his nine year stint at the top of India’s largest car maker and will remain as a Whole-time Director designated as Executive Vice Chairman till the end of September.

Takeuchi has been on the board of Maruti Suzuki India since July 2019 and carries a vast international experience. He was Joint Managing Director (Commercial) at Maruti Suzuki from April 2021 and started his association with the parent company Suzuki Motor Corporation.

Takeuchi takes charge at a moment when the country’s largest carmaker is going through a structural change where the carmaker is pivoting itself to grab a bigger share of the SUV market- the fastest growing segment in the Indian auto industry.

Simultaneously, after years of shying away from electric mobility, the company is taking strides with its parent firm Suzuki Motors committing Rs 10,440 crore to develop capacity for battery and electric vehicles. It plans to launch its first electric vehicle in 2025.

With Suzuki and Toyota entering a global alliance, Takeuchi will also have to plan its future strategies keeping in mind an alliance with Toyota.

Ayukawa played a pivotal role in helping Maruti Suzuki tide over the labour issue in 2013 and drafted a game plan that has helped the company grow its market share beyond 50 percent.

In 2012, workers tore through the Maruti’s plant in Manesar killing one manager, smashing property and setting parts of the factory on fire. Most of them were contract workers and were protesting for many days demanding higher wages and better benefits.

In order to tide over the situation, Japanese parent Suzuki cracked the whip with an across organisational level change which also saw chairman Osamu Suzuki taking a more active role in overseeing the India business.

Under Ayukawa, the company changed its hiring policy where temporary workers have been hired directly by the company and not through third party agents. They also got more benefits, such as free meals, insurance and provident fund, than in the past.

Under Ayukawa, Maruti also launched the new dealership chain Nexa for its premium-end cars. In FY 21, the brand reported 254,000 units in car sales, much higher than overall sales of many auto companies.

“ Ayukawa played a stellar role where he planned and successfully effected a strategy which not only saw Maruti reach a market share of over 50 percent but also held on to it. However, this is the right time for a new leadership as the industry is going through a huge transformation be it technologically, safety and emission features or as business strategy,” said Puneet Gupta, director for automotive forecasting at market research firm S&P Global Mobility.

Gupta said that the job for Takeuchi will be starkly different from that of Ayukawa. The realities have changed with the government focusing more on high standard emission features which will increase the cost of vehicles. 

“With Tata Motors on strong footing, Hyundai and Kia Motors coming together, it is quite difficult for a single company to hold onto a domestic market share of 50 percent. Takeuchi will have to think of a strategy where the overall market share including export stays at that level,” Gupta said.