Maruti earmarks 40% of Rs 4400-crore capex on product development

In a move to strengthen its research & development (R&D), the country's largest carmaker Maruti Suzuki India (MSIL) has said that 40% of its proposed capex of Rs 4,400 crore will be towards new product development. The company's Rs 2,000 crore R&D and testing facility at Rohtak will give further boost to the company, said a senior executive.

In a recent investors call, the company said some of the projects have got deferred to next year. So, the company has proposed a budget of Rs 4,400 crore and 40% of that will be deployed towards new product and development. Capex in 2015-16 was Rs 2400 crore.

The investment includes company's new R&D and testing centre at Rohtak in Haryana.

CV Raman, Executive Director, Engineering, MSIL said the Rohtak centre will help the company to scale up. In addition, MSIL will continue to support SMC on development of global models. The facility will be ready in the next two years.

He added the R&D centre in India has evolved into end-to-end development. MSIL and Suzuki Motor (SMC) complement each other’s capability in R&D.

Suzuki is committed to bring 20 new models by 2020 and atleast 15 of them are expected in India. This is over and above the existing model refreshments and upgrades. Therefore, Maruti Suzuki & SMC are one team with clear division of work. No point duplicating efforts, said Raman.

MSIL started its journey of inhouse engineering capability and model development in 2000, with development of facelift models like Zen, Alto, WagonR and Omni with the support of its parent company, SMC.

From 2003 onwards, MSIL started training its engineers at SMC and initiated co-design work with SMC for design and development of its global model Swift. Since 2008, MSIL started working on full model changes of its existing product Alto, which was launched in India in 2012. It acquired capability of doing full body change by working on this project.

MSIL started working along with SMC from 2010 on global models like Baleno, Ciaz, S Cross which were recently launched in India. It also started work on Vitarra Brezza as the first model to be designed and developed with MSIL as lead for development, parallelly with other global model development work plan with SMC.

Enhancing R&D capability is a journey and Brezza is an important milestone in this journey of capability development.

While working according to Suzuki global processes and standards, all judgments and decisions on Brezza were taken by MSIL team, which reflects maturity of R&D team here and confidence of SMC on MSIL capabilities. Brezza was given as a challenge to Maruti Suzuki.

With Rohtak in, place the company will be able to fast track model development, testing and validation, bring refreshments at a much faster pace. The company is investing around Rs 2,000 crore in the project and it is expected to be completed in two years. It will also bring in capability of validation and it will enable the company to meet the market requirement in a better way, said the company.

MSIL has been sending 30-40 vehicles to Japan for testing, but now all that can happen here and it is an advantage, said Raman.

MSIL aims to sell 2 million cars per annum by 2020 — with new models and refreshments being part of this journey.

Platforms and engines are being developed by Suzuki and Maruti Suzuki will build on India specific design and testing, he added.

Raman said, over the years, R&D in India has progressed well from just backend support to becoming the centre of excellence and now playing a major role in product development.

The days are not far where the product itself can be developed by the centres in India. For which, it needs to do a lot of application engineering work, along with local suppliers, they need to increase their capabilities and need support of component suppliers also.

He added, today there is dearth of engineers and this is a challenge for the industry.

Raman feels the government should see if skills can be developed further and how to change the curriculum where industries and academy can partner to develop better engineers so that the learning cycle becomes shorter.

Holistic approach towards the industry is needed and industry should be nurtured, policy framework, proper time frame should be given to adopt newer technologies and regulations.