India is poised to be the world’s third largest automobile market by the end of this decade and is also on track to be a global manufacturing hub. As the country prepares itself for this high point, Suzuki Motor Corporation chairman and CEO, Osamu Suzuki, is of the opinion that it is vital to have a minimum standard for cost and quality in order to manufacture a successful small car.
In an exclusive interview to Autocar India, Osamu Suzuki said, ”The key to making a small car is to make a success of the concept of a minimum standard for cost and quality. Besides ‘Make in India’, you also require ‘Quality in India’ and ‘Cost in India’.”
“To ensure the base level of quality in the vehicle, you have to get the cost right, specifically for small cars,” he added.
Moreover, Osamu Suzuki acknowledged that the profits in making a small car are also small and urged automakers to take up the challenge. “When you make small vehicles, the profit on them is also small. The total value of the car is also less. But this is precisely the challenge one must take,” he added.
Maruti Suzuki currently has a stranglehold on the small car market in India. For instance, the micro, mini and compact car segment in India sold 141,951 units in August 2015. Maruti Suzuki dominated this space with sales 79,126 units followed by Hyundai at 31,194 units. The carmaker is now trying to shed the budget carmaker label by introducing products like the Ciaz sedan and the S-Cross crossover in the premium car category. The recently showcased Baleno hatchback will be the third premium product in its portfolio.
The small car market in India has proved to be a big challenge for global automakers such as General Motors, Fiat, Ford, Nissan and Renault. However, many of them are actively trying to grow in the affordable car segment with by introducing new products.
Osamu Suzuki also reiterated the need for auto component manufacturers to focus strongly on quality while also continuing to produce low-cost products in order to be among the top suppliers in the world.
The government’s Make in India policy has ramped up manufacturing in India, by enabling favorable industry policies and tax benefits, and also boosted automobile exports. Carmakers such as Hyundai, Nissan and Suzuki are exporting to multiple continents from here.