Suzuki Reaffirms Growing Role of Maruti In Global Roadmap

Murali Gopalan
07 Nov 2023
05:09 PM
4 Min Read

Japanese automaker’s top management discusses the priorities in clean fuel and the challenges of capacity expansion in a detailed investor presentation.

Suzuki Reaffirms Growing Role of Maruti In Global Roadmap  mobility outlook

Suzuki Motor Corporation believes it is important to take “multipathway solutions” in its quest for clean emissions especially for strategically important markets like India.

This can be done “by combining hybrid vehicles, CNG vehicles, and biofuel vehicles, and hydrogen mobility in addition to electric vehicles' that is appropriate for each region and market, in order to achieve a comprehensive reduction in CO2 emissions.

These observations were made by Kenichi Ayukawa, Executive Vice President, during the course of a recent presentation in Japan. This included a detailed analysis of the Indian market which is a pivot for Suzuki Motor Corp worldwide.

Ayukawa is no stranger to the country, having spearheaded operations here as MD & CEO for nearly a decade before his tenure ended in 2022. During this presentation in his now larger global role as EVP of Suzuki, he rewound to January 2023 when the company had announced its intent of launching six EVs in India by 2030. This would begin with the introduction of eVX, showcased at the recently held Japan Mobility Show, in India this fiscal.

Ayukawa also got back to March 2022, during the time of the Japan-India Economic Forum held in New Delhi, when Suzuki had signed a memorandum of understanding with the Gujarat government for local production of electric vehicles, BEVs and BEV batteries. The investments earmarked were around INR 10,400 crore.

“Going forward, Suzuki will continue to actively invest in India and contribute to the realisation of the Government of India's self-reliant India,” he said. The Japanese automaker, he added, would like to focus not only on electrification but also “the penetration of cars using compressed natural gas”. CNG cars, he added, were less expensive than gasoline and emitted about 20% less CO2.

CNG To The Fore

“Maruti Suzuki has been increasing the number of CNG vehicles sold each year. In fiscal 2022, it sold approximately 330,000 CNG vehicles, and the ratio (of CNG vehicles sold) was 21%, accounting for 74% of the sales share of CNG vehicles in India as a whole,” elaborated Ayukawa. The company would continue to promote the use of CNG keeping in line with the Centre’s strategy.

Beyond this, he said, was the new business of biogas, which would make use of India's abundant bovine population. “India has a lot of cattle, and cattle manure contains methane, which has 28 times the greenhouse effect of CO2 and is released into the atmosphere,” continued Ayukawa.

Suzuki was considering reducing the atmospheric release of methane and refining what was contained in cattle manure into a fuel for CNG vehicles that emits less CO2 than gasoline vehicles. Atmospheric CO2 is taken up by grass through photosynthesis and used as food for cattle. Methane contained in manure excreted from cattle is released into the atmosphere.

“By collecting the manure and artificially generating biogas to refine and use the fuel for automobiles, the CO2 limitation effect is created. Therefore, although CO2 is emitted from cars using biogas fuel, CO2 can be said to have been suppressed by subtracting the greenhouse effect reduction caused by refining methane produced from manure into biogas fuel, making it carbon-neutral,” said Ayukawa.

Citing an example of California in the United States, data there showed that the use of biogas fuel in automobiles reduced CO2 emissions by 748 g per one km. In addition, the residues after biogas generation could be used as organic fertilisers.

Biogas As An Option

“By using biogas fuel, which Japan uses mainly for power generation, in automobiles in India and around the world, starting with India, we believe that it can contribute not only to the reduction of methane emissions to the atmosphere and the spread of carbon-neutral fuels, but also to the revitalisation of rural areas, creation of new jobs, recycling of waste, improvement of energy self-sufficiency, and the formation of a recycling-oriented society,” said Ayukawa.

This business model could also be deployed in Africa and other emerging countries. A memorandum of understanding was signed in December 2022 with Banas Dairy in Palanpur (Gujarat), the largest dairy manufacturer in Asia, as well as the National Dairy Development Board for the establishment of a biogas production plant. Maruti Suzuki plans to establish four such facilities in India from 2025 onwards.

Ayukawa also pointed out that India had overtaken Japan to become the third largest automobile market in the world, behind China and the United States, and was expected to continue growing. Under such circumstances, EV vehicles with zero CO2 emissions during driving were one of the solutions to achieving carbon neutrality.

“However, achieving carbon neutrality requires an overall reduction in CO2 emissions, not just during driving. Therefore, we also need to think about CO2 generated during the production of those vehicles and the refining of fuels used for production of energy such as electricity,” he said.

The eVX, Suzuki's first global strategic EV, was unveiled at the Auto Expo 2023 held in India in January this year. It will be introduced in Europe, India, Japan and the rest of the world in 2024. As part of its biogas drive, Suzuki will have the Wagon R CBG (compressed biomethane gas), displayed at the Japan Mobility Show, on offer in the market.

Trade Deficit

During his presentation, Ayukawa said that though the Indian economy was doing well, the trade balance showed that it has a chronic trade deficit “which indicates that it is facing challenges”. Energy resources such as crude oil, coal, and petroleum gas are among the imported items. In the past 25 years, the value of imports has increased sharply by about 45 times. “When the price of crude oil rises sharply, the tendency is that the trade deficit also expands,” he said.

With the Centre now raising the slogan of ‘Make in India’ and ‘Self Reliant India’ with the aim of improving the trade balance and strengthening exports, Suzuki also aims to contribute to the cause through “promotion of localisation and biogas business”.

Additionally, since 2021, Maruti Suzuki’s exports (particularly to Africa) have increased significantly, reaching a record 259,000 units in fiscal 2022. The first half of this fiscal year was 133,000 units, the same level as the previous year which recorded the highest ever exports. “India is a very important country for our company and is still a market that can grow in the medium to long term,” said Ayukawa.

The overall Indian automobile market is expected to expand to six million units by 2030, and Maruti Suzuki aims to sell three million units, a 50% share. “We need to secure production capacity to keep up with the increase in sales volume. In line with the expansion of the market in 2030, Maruti Suzuki aims to have a production capacity of four million units by 2030,” elaborated Ayukawa.

Enhancing Capacity

This is in order to meet the demand of its export business, which is expected to expand to one million units, in addition to the sales volume of three million units in India. All this translates into about twice the current production capacity.

“We have already started construction of a new plant in Kharkhoda, Haryana. In April this year, we announced the construction of a new plant with an additional one million units. In addition, we will expand our sales and service networks, improve our product capabilities, and adapt to rapid expansion and changes in our business as a whole. Therefore, we will work more actively than ever to secure and develop human resources to support our business,” said the EVP of Suzuki Motor Corp.

It was keeping this in mind that Suzuki Motor Gujarat, a manufacturing plant owned by Suzuki, will now become a subsidiary of Maruti Suzuki. According to him, this was done to increase efficiency and consolidate production bases. “In the future, Maruti Suzuki plans to share roles in increasing production capacity and Suzuki plans to cooperate in developing technologies in leading areas,” said Ayukawa.

Photo: Mohd Nasir

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