Maruti Suzuki's growth target can't be met by domestic demand alone: Rahul Bharti

Maruti Suzuki India Ltd's ambition for growth cannot be met by domestic demand alone, according to Rahul Bharti, executive director of corporate affairs at India’s largest carmaker.

"India has to take a larger share of global trade. We are at a modest level. And there is no reason why we should not do that," Bharti tells Fortune India in an interview.

14% of Maruti Suzuki’s sales came from exports in the financial year 2023-24. The company is targeting 20% sales from exports by FY31. “We were at 95,000 units just before Covid-19. And we grew by 3X till last year to 2.80 lakh units. We will grow by another 3X on top of it by 2030 to 8 lakh units. That’s a nine-fold jump in 10 years in exports,” says Bharti.

Rising exports come at a time when domestic demand for passenger vehicles, especially in urban markets, has softened in the first half of the ongoing fiscal. Bharti, however, shrugs off the local slowdown. "We are not overly concerned about urban slowdown. India is the third largest car market. It doesn’t happen that every month you will have a straight directional graph. You have commas, semicolons along the way. None of our expansion plans have been affected. Our investments are going on," he says.

Maruti Suzuki plans to export 3 lakh cars in FY25. In August, it began exporting Made-in-India Fronx to Japan, one of the most quality-conscious and advanced automobile markets in the world. The Fronx is the second model from Maruti Suzuki to be exported to Japan, after Baleno in 2016. Maruti Suzuki is India’s largest passenger vehicle exporter. It clocked a 42% share in exports of passenger vehicles from the country in FY24.

Exports are strategic for Maruti Suzuki as they reaffirm that the automaker is globally competitive on cost, technology and quality, says Bharti. “If you are successful in exports, it means you are globally competitive on technology, cost and quality. If you have satisfied customers and won them against competition in 100 countries of the world, chances are in your home country you will also delight customers,” Bharti says.

Maruti Suzuki, which exports 17 models to 100 countries, hasn’t been majorly affected by disruptions in global trade such as the Red Sea crisis.

“The strategy in exports is to diversify. If you have a large basket, these individual disruptions don’t affect you. The container crisis didn’t affect us. The Red Sea crisis didn’t affect us. The Bangladesh crisis didn’t affect us,” says Bharti. “Some countries may face currency fluctuations or economic turmoil. It keeps happening almost all the time. Today, Sri Lanka has zero exports. At some point, it was 12,000 cars a year,” he adds.

Increasing exports are also helping the carmaker in lowering retail prices in India. “With exports, we can expand the total production volumes of certain models which will help us to reduce the cost that goes into developing new models. That helps us to reduce retail prices in the domestic market,” says Hisashi Takeuchi, managing director and CEO of Maruti Suzuki.