Japan’s Suzuki trims India sales target amid competition, scales back EV launches

TOKYO: Japanese carmaker Suzuki Motor has trimmed its sales target in India, its “most important market”, and scaled back its line-up of electric car launches, even as it plans to expand global sales by a third to 4.2 million vehicles by fiscal year 2030.

Suzuki expects to sell about 2.5 million cars in India by March 2031, down from an October 2023 target of 3 million, and will launch just four EVs in the country instead of six planned, the company said on Thursday.

The sales cut in India, Suzuki’s biggest market by revenue and volumes, comes as local unit Maruti Suzuki has been losing ground to new, feature-rich cars and SUVs from rivals Tata Motors and Mahindra & Mahindra.

The scaleback on EV launches coincides with a slowdown in their sales globally and Tesla’s impending entry in India, the world’s third-largest car market, where it has finalised locations for its first showroom.

Maruti’s share of India’s passenger vehicles market is down to 41% from a recent peak of about 51% by March 2020. It had set a market share target of 50% by March 2026 which it now expects to achieve by March 2031.

“The competitive environment is becoming increasingly severe, and the quality of product functions, equipment and services required by customers is increasing,” Suzuki said in a presentation laying out its five-year strategy to March 2031.

A shift in buyer preferences in India has brought a steep decline in the sales of small cars, a mainstay for Suzuki, and a rise in the popularity of mid-sized SUVs which the Japanese company has been late in introducing.

Suzuki now plans to beef up its line-up of SUVs in India and expand manufacturing capacity there to 4 million units a year “at appropriate time” from about 2 million. The company had earlier planned to scale up to 4 million units by March 2031.

India is still at the forefront of Suzuki’s expansion and will receive 60% of a planned investment of 2 trillion yen ($13 billion) by that date, and will be its production hub for global exports to the Middle East and Africa, including for EVs.

“India is Suzuki’s most important market where we are putting the most effort,” President Toshihiro Suzuki told a strategy briefing in Tokyo on Thursday.

“The sales situation of BEVs is not favourable, particularly in Europe. This shows that new technologies cannot grow without customer acceptance,” he said, adding that Suzuki was working on a mix of technologies including hybrids and bio gas.

Suzuki also said it would target an overall operating profit margin of at least 10% by 2030, up from 9.2% in the past financial year, and aims for revenue of 8 trillion yen by the 2030 financial year, a jump of 49%.

Gaurav Vangaal, an S&P Global analyst in India, said the mid-year plan reflected a strategic recalibration in response to competition and a slowing global approach towards EV transition.