Diesel void is hurdle in expansion of Maruti: Shinzo Nakanishi

Maruti Suzuki India Ltd (MSIL) is facing a major challenge in launching new products in the fast-growing sport utility vehicle (SUV) and multipurpose vehicle segment as it lacks its own diesel engine technology, Shinzo Nakanishi, the company's outgoing managing director (MD) and chief executive officer, said on Friday.

"That we do not have our own diesel engine dose pose some constraints in terms of introducing some models. But it requires the top management to decide on it as it requires a huge investment to undertake this venture," Nakanishi said.

Currently, diesel cars accounts for 30 per cent of Maruti Suzuki sales and the number is expected to go up to 40 per cent by the next fiscal."Despite diesel cars sales slowing after the recent increase in fuel price, this segment still accounts for 70-80 per cent of the sales of models in which diesel options are available," R.C. Bhargava, chairman, MSIL said.

Even when industry sales of diesel cars witnessed a decline of five per cent in February compared to growth of seven per cent and nine per cent in December and January respectively, MSIL's diesel options of Swift, Dzire and Ertiga continued to have a waiting list of customers. Ertiga alone has an order backlog of 11,000 units.

This fiscal year, the company sold 4 lakh diesel cars and next year the number is expected to go up to 4.65 lakhs. Currently, MSIL has diesel option in Swift, Swift DZire, SX4, Ritz and Ertiga. All of Maruti's current line of diesel models use the same 1.3-litre multi-jet engine sourced from Italian auto major Fiat. Last year, MSIL signed a deal with Fiat to supply 1,00,000 of such engines every year till 2015.

The 65-year-old Nakanishi, who played a key role in setting up the joint venture between Suzuki and the Indian government, will step down on March 31 to pave the way for his successor Kenichi Ayukawa. Bhargava recollects him as "the first person to come from Suzuki in 1981, when we were negotiating the joint venture with them".

"I came to India 22 years ago. My daughter was born here and now she is getting married. It's been a long association," recalls Nakanishi. "Now, I will be able to give more time to my family," he added with a smile.

Recollecting his first visit to India in 1982, Nakanishi said, "The moment I touched India, I was confident that there was a huge potential in the market. That time no one believed us. I am still confident about the market. For the short term, there is a slowdown but in the long-term, the auto sector is going to grow. India has a bright future considering the country's economy, expected increase in per capita income and the growth of the middle class," Nakanishi added.

Courtesy: Mail Today