Maruti Suzuki making production lines flexible to roll out ICE, EV models

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Maruti Suzuki is making its production capabilities flexible so that more models, including electric vehicles, could roll out from the same manufacturing set-up, according to a senior company official.

The country's largest carmaker Maruti Suzuki India is looking to add another 2 million units-production capacity by 2030-31 with about 28 different models in the market.

Currently, the auto major has a production capability of around 2.6 million units per annum across its manufacturing plants in Haryana and Gujarat.

The two plants in Haryana at Gurugram and Manesar roll out around 16 lakh units per annum. The new plant in Kharkhoda has also commenced production.

To begin with, the new facility will have an annual production capacity of 2.5 lakh units and produce the compact SUV Brezza.

Suzuki Motor Gujarat, a unit of the company, has also set up a facility in Gujarat with an installed production capacity of 7.5 lakh units per year.

"In terms of production planning, increasingly we are making our plants more flexible so that more lines can manufacture more models. And we are also taking care that the newer lines that are established can manufacture EVs also," Maruti Suzuki India Senior Executive Officer (Corporate Affairs) Rahul Bharti said in an analyst call.

MSI plans to launch its first EV --e Vitara in September this year and majority of the production in the first year is expected to go to overseas markets. 

Bharti said the EVs are far heavier vehicles than the traditional models due to the battery weight and the enhanced body strength to handle that weight.

"So, there is some difference in the production line on that account. But we are making it flexible, whether it is in Gujarat or Kharkhoda (Haryana)," he added.

"The utilisation is something that we have to closely watch, and the operating leverage associated with it. That is something we will be watchful of," Bharti said.

On a question regarding the profitability of the EVs, he noted that the company is conscious that by design EVs will have a much lower profitability and that's true for the entire industry.

"We can't expect EVs to have the same level of profitability as IC engines. And if they were, then the government probably doesn't need to have a 5 per cent GST or so many schemes or so many support policies on that. So, we have to be conscious of that," Bharti said.

Having said that, the company's efforts on decarbonisation will be through multiple technologies and the automaker "will try to leverage all possible technologies to reduce carbon to supplement our EV efforts," he added.

"Exports will obviously help us a bit as compared to a standalone domestic scenario, because you get better economies of scale, and you may get some pricing power in some markets or others. So, it remains to be seen," Bharti said.

On the expected introduction of stricter CAFE-III norms, which aim to reduce carbon dioxide emissions from vehicles, he said that the company is expecting some kind of finalisation soon.

"Industry is in discussion with the government on this with the Ministry of Power, Bureau of Energy Efficiency and they are seized of the matter. They have gone into great details, and we are expecting the policy to come out in about a month or two," he said.