Updated February 27th, 2024 at 12:43 IST

Maruti Suzuki shifts focus to hybrids amid slowing EV growth: Report

While Maruti Suzuki's foresighted approach, rooted in technological diversity, positions the company favourably amid the evolving dynamics, analysts said.

Reported by: Tanmay Tiwary
Maruti Suzuki CNG | Image:Maruti Suzuki
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Maruti Suzuki shifts focus to hybrids: The country’s largest carmaker Maruti Suzuki India Limited is shifting its focus towards hybrid vehicles, leveraging its tech-agnostic approach to navigate the shifting automotive landscape, analysts said.

Despite a previous surge in electric vehicle (EV) sales worldwide, recent indicators suggest a moderation in growth, attributed partly to semiconductor shortages and challenges in charging infrastructure expansion. 

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Image Credits: Maruti Suzuki

Major automotive players including Mercedes, Ford, GM, and Volkswagen have deferred EV investments, signalling a broader industry trend towards hybrids in response to evolving consumer preferences, brokerage firm JM Financial said in a note.

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Meanwhile, Tata Motors, a dominant player in the electric vehicle market, has recently downscaled its EV sales estimates and reduced prices to stimulate adoption, citing similar challenges of inadequate charging infrastructure and consumer reluctance to pay premiums.

While Maruti Suzuki's foresighted approach, rooted in technological diversity, positions the company favourably amid the evolving dynamics, analysts said. 

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Having pioneered factory-fitted CNG vehicles in India back in 2010, the automaker has witnessed a fivefold growth in CNG sales over the last five years, with penetration reaching approximately 30 per cent.

Notably, the company's decision to phase out diesel vehicles aligns with the declining industry trend, further highlighting its strategic acumen.

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Embracing a multi-faceted approach, Maruti Suzuki is intensifying its focus on hybrids, aiming to launch five hybrid models over the next 2-3 years, with plans to develop cost-effective solutions tailored to different market segments. 

Image Credits: ANI

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Additionally, the collaborations with Toyota for hybrid technologies reinforce its commitment to innovation and sustainability.

Furthermore, the tax rationalisation initiatives could provide an additional boost to hybrid adoption, potentially narrowing the total cost of ownership gap between hybrids and electric vehicles, analysts highlighted. 

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For instance, a reduction in the Goods and Services Tax (GST) rate could boost the competitiveness of hybrid models vis-a-vis their electric counterparts.

Considering these factors, JM Financial analysts maintain a positive outlook on the automaker, underpinned by its adaptable business strategy and diversified product portfolio. 

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With a target price of Rs 13,000, the company remains set to capitalise on emerging trends while offering consumers a spectrum of environmentally friendly mobility solutions.

As of 11:54 am, Maruti Suzuki shares were trading 0.12 per cent higher at Rs 11,473.10 per share.

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Published February 27th, 2024 at 12:05 IST