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Maruti Suzuki bets on small cars amid SUV craze
28 Apr
Summary
- Maruti Suzuki focuses on entry-level cars despite SUV popularity.
- Company chairman cites affordability and basic mobility needs.
- Profit dropped due to soaring raw material costs.
Maruti Suzuki is strategically doubling down on entry-level cars, even as SUVs dominate the automotive headlines. The company's chairman, R. C. Bhargava, emphasized that small cars have a significant long-term future in India due to affordability and the basic mobility needs of a large population segment.
This focus comes despite a recent surprise drop in the company's quarterly profit. For the quarter ended March 31, profit declined to 35.91 billion rupees from 38.57 billion rupees a year earlier. This decrease was primarily driven by a nearly 51% surge in raw material costs, which pushed overall expenses up by 28% and compressed margins.
Despite these cost pressures, demand for vehicles remains resilient, with revenue rising due to improved realisations and volumes. The company is also expanding its SUV portfolio to capture higher margins, balancing its traditional strength in small cars with market trends. Additionally, new trade agreements are opening up fresh export opportunities, diversifying market reach.
