Maruti Readies Plan for LCV Foray

Co's new 2-cylinder, 800 cc diesel engine may be key to its successful entry into the pick-up truck space

KETAN THAKKAR MUMBAI 

    Maruti Suzuki, India's largest car manufacturer, is exploring a foray into India's fastgrowing small commercial vehicle space. The segment is currently dominated by Tata Motors Ace with over 50% market share. 
Though the Japanese car manufacturer had the Omni Van, used as a cargo vehicle, it did not have a competitive offering in the loadcarrier segment, due to the lack of a small diesel engine. But with the development of the company's two-cylinder, 800 cc diesel engine for the passenger car shifting to India, it is actively exploring options to use the potential workhorse to enter the small pick-up truck market, ET learns. 
The project is codenamed 'AP' and if the exercise fructifies into an actual investment, the possible entry into light commercial vehicle (LCV) space could happen "between 2015 and2017", according to informed sources. ET has learnt that the company is likely to develop an all-new platform, or may use the Suzuki carry pick-up truck platform which is sold in South East Asia and may tweak it to handle the overloading abuse in the country. When contacted, a Maruti Suzuki spokesperson replied that the company does not comment on product plans. 
According to Frost & Sullivan, the Indian small and light commercial vehicle segment is likely to grow by a compounded annual growth rate (CAGR) of 18% over the next five years to 8,30,000 units by 2016. 
With the development of infrastructure, the country is expected to shift to the 'hub-and-spoke' model of transporting goods. In the hub-andspoke model, heavy trucks ply on big highways, or hubs, and small commercial vehicles act as spokes in cities where the movement of heavy vehicles are restricted. 
In the April-November period, the mini truck and the pick-up truck segment combined (i.e. vehicles with weight below 3.5 tonnes) posted a growth of 24% with sales of 2,75,900 units. In the period, market leader Tata Motors posted a growth of 22.9% selling 1,57,183 units. 
ers in the small truck space, Tata Motors continues to enjoy over 50% of the market share and the others too are growing, that clearly shows that there is room for more players. Maruti Suzuki can certainly be a strong challenger to Tata Motors with the widest possible reach, but having a suitable diesel engine is the key," said Rathore. 
Just like the passenger car space, even in the mini-truck category, the demand is getting upgraded from 0.5-1 tonne segment of Ace Zip to 2 tonne segment of Tata Motors Super Ace, Mahindra Genio and Ashok Leyland Dost category. The sub-two tonne segment of Ace, Maxximo and Ape grew just 2.70% in April to November period to 1,61,741 units versus 1,57,492 units sold in the same period in FY-12. While Mahindra & Mahindra and Piaggio fared well in the last fiscal with their Maxximo and Ape mini trucks, the two automobile companies have seen sales dipping over 20% and 70% respectively, in the current fiscal. 
Experts say it will be interesting to watch, which space Maruti Suzuki would prefer to enter. "There is a clear upgrading happening from sub-one-tonne trucks to higher payload trucks of two tonnes and above and it is clearly seen in the numbers of Ashok Leyland Dost which has been a run away success," said an analyst with a leading broking firm. 
ketan.thakkar@timesgroup.com 
Despite the entry of major players like Mahindra & Mahindra, Piaggio and Ashok Leyland, Tata Motors continues to lead with a market share of around 57% this fiscal. Experts believe Maruti Suzuki may pose a major threat to Tata Motors as it has a wider reach in the country. Deepesh Rathore, managing director, IHS Automotive says, the technological entry barriers are limited in the mini truck space and the segment is one of the fastest growing segments in the Indian automotive industry with further potential to grow large volumes. 
"Despite the entry of many play-