I always appreciate your support and understanding for the growth of Maruti Suzuki.
In 2015-16, we sold 1,429,248 vehicles, growing faster than industry increasing our market share for the fourth consecutive year to 46.8%. Our profit went up 23% and we could take several steps for the long term.
You might recall, in our Annual Report of 2013-14, we had articulated a vision of 2 million sales by 2020. The theme of the report ‘Maruti Suzuki 2.0’ was not just about 2 million sales; it was about the new phase, the new incarnation of Maruti Suzuki. The path to 2 million could be quite different from the path to 1 million. We need a fresh thinking and fresh approach for this new trajectory.
The Honourable Prime Minister has articulated a grand and extremely relevant vision of ‘Make in India’. It is our task to take it to the industry level and enterprise level including in our supply chain and realise its full potential. The world will accept products made in India, if we can give them Quality. Mr. O. Suzuki had incorporated this in the slogan calling it – ‘Make in India with Quality’. Product Quality is very important but now we have to challenge our own frontiers and take them to the next orbit. We have to observe Quality in not just our products but every aspect of our business. I call it ‘Quality of Business’. And in enhancing the Quality of Business, we will not be satisfied with improvements; we need innovation.
In the past two years, we have taken fundamental and substantive steps to enhance our Quality of Business. We saw the highest number of new product launches in a year. Within these new products, the delight factors are also getting redefined. Traditionally, we used to provide engine performance, fuel efficiency, space, ride comfort and similar factors in the car. While they continue to be very important, now we are adding delight through styling, infotainment, navigation, hybrid technology, additional safety and other luxury features. These products have been accepted well by the customer.
We entered into the SUV and crossover segments. Market response has been very good and we hope to attain a healthy market share of the UV/SUV segment. Similarly, we are encouraged by the market response to the Ciaz in the premium car segment.
Make in India also means make for the world. The Baleno became the first Indian car to be sold in Japan. It is also exported to Europe and many other markets of the world. We are making a lot of market development efforts in exports so that in the next few years we are on a strong footing to provide cars to many countries of the world from India.
We have promised the Indian consumer about 15 new models till 2020. New Product Development with contemporary technologies needs R&D capability. This R&D capability has to have both quantity (capacity) and quality (excellence). Our Rohtak R&D Centre is coming up well. The first few facilities have been commissioned and the coming three years will witness more expansion. If we can design and develop in India, we will get global competitiveness in technology, cost and quality much faster. That will be our next leap – Create in India. The Vitara Brezza, developed by Indian engineers using Suzuki global development process and platform is our first step towards Create in India.
Quality of Business demands that we delight our customer in the quality of interaction they have with us. With this thought we had launched the NEXA channel and now we have 150 Nexa showrooms in 94 cities. We will keep enhancing the number of showrooms and innovating on the experience we can give to our customers. Our existing network of sales and service will also be expanded to have more touch points with the customer. Similarly for our LCV, we will have a dedicated commercial channel which is just right for LCV customers. We have put in place a dedicated organisation to help us identify and acquire sites for our own retail space from a long-term derisking point of view.
We are also aligning all our processes and operations including our supply chain to keep enhancing the quality of manufacturing. It is a continuous journey. Focus on all these areas to get closer to the customer would require considerable management bandwidth. Our contract manufacturing arrangement with the Gujarat plant will enable us to devote time to customer-centric functions. The contract manufacturing arrangement was approved by minority shareholders in the year through a voting process. Since we have a capacity constraint, the Gujarat plant commissioning is being expedited and may start operations by early 2017.
As a market leader and a responsible corporate citizen, we are fully sensitive to our duty towards the environment. We were the first ones to launch mild hybrid products with reasonably good volumes. This process of hybridisation will be expanded further in the next few years. We are providing factory-fitted CNG cars and are making efforts to expand their penetration. We are also committed to invest in the appropriate technologies and changes required to meet advanced emission regulation in the country.
In the area of vehicular safety, India is adopting the European crash test regulations in the next few years and we are on course to meet the timelines. As of now most of our models are equipped with enhanced safety features like airbags, either as standard or as an option in all variants.
We were able to scale-up our social initiatives and projects with a 110% increase in CSR spend over the previous year. We integrated with society more closely with interventions in skill development, safe driving and local community development. In particular I am happy to share, under the Clean India Mission, we are aiming for 100% coverage of toilets and sewer systems in our neighbouring villages in Haryana and Gujarat.
In the entire life cycle of a car, the element of Recycling & Scrappage was missing in India. The entire industry is very positive that for the first time the Government is addressing this and has announced a draft policy to enable creation of Recycling & Shredding Centres. This infrastructure creation will truly make the Indian automobile ecosystem more comprehensive, more sustainable and also create jobs in the process. We are in a quick position to support this as all our models are already ELV (End of Life of Vehicles) compliant well ahead of this regulation coming to India.
The Indian market is very promising and we dedicate ourselves to realise our vision in our Karmabhoomi, our land of action and duty.
Managing Director & CEO