Suzuki Motor's position in India and other markets is under serious threat from Toyota's buyout of rival Daihatsu, Suzuki's president has said.
Toyota is to buy its remaining stake in Daihatsu as part of a strategy to strengthen its push into compact cars for emerging markets – a move likely to increase competition for Suzuki in one of its biggest and fastest-growing markets, a Reuters report noted.
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Profit generation will become a more challenging proposition for Suzuki as multiple competitors seek to muscle in on the Indian market, Toshihiro Suzuki told Reuters in New Delhi.
"It is not only the Toyota alliance, but the entry of other international (car) manufacturers in India which is making the competition tougher," he said.
The company will need to build and sell cars that exceed buyers' expectations and will also need to enhance its sales and service network, Suzuki said, as it plans to launch 20 new models globally by 2020, 15 of which will be brought to India.
According to Reuters, in the fiscal year to 31 March, Maruti Suzuki India accounted for 41% of group sales, selling 1.2m passenger vehicles.
It is India's top-selling carmaker, with nearly 50% of the passenger vehicle market, but faces growing competition from the likes of Hyundai and Honda.
The business is rationalising its production process and in the next five years will reduce the number of platforms on which it builds cars in India to three or four, Maruti's head of engineering, CV Raman, told Reuters.
This will enable the carmaker to use the same components in multiple models to achieve economies of scale and allow it to reduce car weights to improve fuel efficiency, Raman said.
"It is one of the core engineering inputs … to improve our competitiveness," Raman said, adding that parent company Suzuki will invest in developing the technology for the platform.
To reduce dependence on India, Suzuki told Reuters the carmaker needs to increase sales in Europe and Asia while improving profitability in those regions. [However, unlike Daihatsu, which vacated Europe in 2009, Suzuki still sells there – ed.]
Suzuki told the news agency the company is not planning to form any kind of alliance with Toyota or any other carmaker but will instead work with component manufacturers and raw material suppliers to enhance safety and fuel-efficiency technology.
Its Indian operation has previously supplied rival Nissan with an Alto-based small car for domestic and export sales.
