To weed out competition, Maruti Suzuki bets big on CNG, hybrid cars

To weed out the competition, Maruti Suzuki India (MSI) plans to go full throttle to develop various kinds of alternate technologies, including CNG powered cars and hybrid vehicles, and not just electric vehicles, a top company official said .

Maruti Suzuki, which already has a market share of 50 per cent in the domestic passenger vehicle segment, is keen to partner government or oil companies in order to push for CNG powered vehicles in the country.

"We are going to try and push this acceleration in use of CNG, hybrid and other alternate technologies. We are going to push all technologies, and not limit ourselves to one technology," MSI Chairman RC Bhargava said.

He said the company wants to help reduce oil import and air pollution and that its view is similar to that of the government.

"We want to have clean cars in the country, we want to reduce oil import and we want to reduce pollution. Our objective is same as that of the government. For doing that we do not want to put all our hopes on battery cost reduction. We want to look at other alternate technologies as well," Bhargava said.

Without waiting for the cost of electric vehicles to come down, MSI wants to go out for alternatives like CNG in the country.

"The government has already put the use of CNG for transportation at higher priority than its use for power generation...We would like to use CNG for cars as far as possible. CNG is best suited for small cars," Bhargava said.

He said if small cars were to be electrified it would require substantial reduction in battery cost which means technology of some sort has to come for the rescue.

He added that Indian market is different from any other market in the world, with 75 per cent of its cars costing less than Rs 5 lakh.

"There is no market in the world where there is such dominance of small cars. The implication for electric cars is that, at today's battery costs, price of the vehicle goes up by Rs 6-7 lakh. Now, on Rs 5 lakh cars YoY, add another Rs 6-7 lakh; do you think anybody would buy? Affordability becomes a huge problem," Bhargava said.

He further added, "While certainly we need to push electric cars, but we should not forget CNG, hybrids, ethanol and methanol. Our view is to keep all options open, put all these options in front of customer and then let him/her decide what is best suited for his/her requirements," Bhargava said.

All such vehicles, run on alternative fuels and technologies, help in reducing oil imports and air pollution. So it doesn't matter if it is achieved by electric vehicle or CNG car, he added.Bhargava said the company would even try to work out a joint programme with oil companies for CNG push in the country.

"Oil companies and we can co-ordinate our actions. They expand the sale outlets we expand the production of CNG cars, so both go hand-in-hand in a coordinated manner," he added. 

Meanwhile, Maruti Suzuki India last week reported a 10 per cent rise in net profit to Rs 1,882.1 crore for the last quarter of fiscal ended on March 31, 2018.

The company had posted a net profit of Rs 1,710.5 crore in the January-March period of 2016-17, MSI said in a statement.

"Increase in effective tax rate impacted net profit," MSI said.