New Delhi: Automobile maker Maruti Suzuki is planning to expand manufacturing capacity by up to 1 million (10 lakh) vehicles per year, as well as launch a new seven-seater hybrid car sourced from Toyota, the company said in a statement Wednesday, while announcing its fourth-quarter earnings.
“In light of the estimated market demand including exports, the board in principle approved the creation of additional capacity of up to one million vehicles per year,” read the statement.
Maruti Suzuki posted a record annual net profit of Rs 8,049.2 crore for the financial year 2022-23, more than double the net profit of Rs 3,766.3 crore in fiscal 2021-22 said the statement. It also sold a total of 1,966,164 vehicles during the year, despite missing production of about 170,000 units due to a shortage of electronic components.
“This translated to a growth of 19 per cent over financial year 2021-22 sales volume of 1,652,653 vehicles. Sales volume in the year comprised 1,706,831 units in the domestic market and highest-ever exports of 259,333 units,” the statement said.
The company also registered net sales of Rs 112,500.8 crore in the 2022-23 fiscal, as compared to Rs 83,798.1 crore in FY 2021-22.
“The year 2022-23 has been a much better year than the previous one. And this has happened despite 2022-23 witnessing all kinds of headwinds… the Ukraine War has continued to take its toll, inflation went up very high all over the world, commodity prices shooting up (in the beginning of the year), semiconductor problems have remained and we have (had) quite a loss of production,” R.C. Bhargava, chairman, Maruti Suzuki India, said during a video call with journalists after announcement of results.
He noted that in its 40th anniversary year, Maruti Suzuki “recorded its highest-ever annual sales volume” — 1,966,164 vehicles — and “in a landmark moment, annual turnover surpassed the Rs 1,00,000-crore mark”.
Bhargava further announced that keeping in mind the estimated market demand including exports, the company board had approved the creation of an additional capacity of up to 1 million vehicles per year.
Talking about the introduction of new vehicles, he said Maruti Suzuki would introduce one new product in the premium segment which will be sourced from Toyota.
“The vehicle will be a strong hybrid, three-row top-of-the-line kind of vehicle in terms of price, and I don’t think the volumes would be very large but it’s a path-breaker vehicle in a sense because it’ll be carbon-friendly. It will be a hybrid… we will be introducing it in two months or so,” he said.
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‘Enough cash reserves’
Bhargava pointed out that “a significant change has happened on the export front”. “In 2022-23, our exports went up to 2.59 lakh (units). For the second year running, we have been the largest exporter of cars in the country. And we could export more cars but again, there is a production constraint,” he said.
According to the company’s estimate, by the end of 2030, its exports alone could touch “as much as three-quarters of a million cars”. Hence, looking at the future demand over the next eight years, the company plans to expand capacity by up to 10 lakh units, for which a new plant is being considered.
Maruti Suzuki currently has an annual manufacturing capacity of 15 lakh units at its two plants in Haryana (Gurgaon and Manesar), and is setting up a third plant in the state’s Kharkhoda. Once fully operational, the Kharkhoda plant will have a capacity of about 10 lakh vehicles, according to the company. Further, the Suzuki Motor manufacturing plant in Gujarat has a capacity of 7.5 lakh units.
“We still have to work to determine where this (proposed new plant) should be put up… get the board approvals in terms of financing and phasing and all of that,” Bhargava said, adding that the new plant along with the under-construction Kharkhoda plant are expected to be financed from internal resources. “We have enough cash reserves,” he pointed out.
On electric vehicles, he said the company will have six different models of electric vehicles by the end of 2030. “I think the fear that Maruti has been slow in moving the electric vehicle segment is really not going to make any difference, because I think these vehicles will take reasonably large market share in that segment,” Bhargava asserted.
Maruti Suzuki’s board of directors has also recommended the highest-ever dividend of Rs 90 per share — face value of Rs 5 per share — compared to Rs 60 per share in FY 2021-22, the company said in its statement Wednesday.
During the fourth quarter which ended on 31 March, the company registered net sales of Rs 30,822 crore, an increase of 20.8 per cent compared to the same period in the previous year, the statement added. Its net profit for the quarter stood at Rs 2623.6 crore, higher by 42.7 per cent, compared to Rs 1838.9 crore in the corresponding period.
The company also sold a total of 514,927 vehicles during the quarter, higher by 5.3 per cent compared to the same period in the previous year. While domestic market sales stood at 450,208 units, sales in the export market were at 64,719 units, said the statement.
(Edited by Nida Fatima Siddiqui)
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