Maruti Suzuki is more Japanese than Indian, even though its largest market by volumes continues to be India, where it is head and shoulders above the competition in terms of marketshare.
So when Toshihiro Suzuki, president and COO of Suzuki Motor Company (SMC) says that SMC feels threatened about Daihatsu Motor’s potential entry into India, one should take that seriously.
“Daihatsu will be a threat to SMC not only in India, in other markets as well,” Suzuki said. “It is not only the Toyota-Daihatsu alliance, but the entry of other international brands in the market that is bringing in tough competition. Generating profits in India has become relatively tougher.”
Daihatsu is a Japanese small carmaker in which Toyota Motors, the country’s largest carmaker, had acquired a controlling 51% stake in 1988. Toyota raised its stake to 100% on Sunday in a bid to augment its presence in the small car market. Toyota which already has a small-car in India may now bring even more vehicles to India, which might pose a threat to Maruti’s gigantic presence in the segment.
The threat emanates from Japan as Daihatsu does not sell any products in India right now. But in Japan it is the fifth largest carmaker by sales, which are not far behind Suzuki, which is the third largest automaker there.
Toyota hired Varun Yadav as manager of Daihatsu in India in June 2014. According to Yadav’s Linkedin profile, one of his five roles at Toyota is, “Market survey of A-segment vehicles in India, Sales trend, government regulations and competition strategies.” A-segment is the European classification for small cars.
Suzuki seems to be aware of Daihatsu’s plans. “Although we have not decided any counter measures, but the critical thing is to manufacture the right products as per customer needs. We will also have to give sales and services superior to what the customer expects,” Suzuki said.
Maybe, that is why Suzuki wants to focus on compact cars, and says that it will be working to bring down cost of BS-VI variant vehicles. So, does that mean that most of new launches will be in the compact car space?
Suzuki will not disclose that. “To stay relevant in the market, SMC will also change plans as per the requirement of the market,” said Manju Gupta, an interpreter at Maruti Suzuki India.