We expect an improvement in chip situation from second quarter onwards: RC Bhargava, Maruti Suzuki

” I do not think anybody can predict margins going forward in any industry. It is just not possible. There are so many variables which are there and the world today is not a very predictable place. The number of changes and unexpected events which happen are enormous. So I mean, I am not at all capable of predicting futures and margins,” says RC Bhargava, Chairman, Maruti Suzuki

What is the reason for adding extra capacity?
The reason is that our predictions of demand going forward till about 2030-31 indicate that there is a gap in our supply position compared to what we think the demand is likely to grow to. This is including the export demand because the big difference from earlier times is in the quantum of exports, which we think will happen by 2030-31. And that change in the export situation is primarily what is driving the need for adding extra capacity.Talking about the margins, they are once again about 10% after FY21, are they sustainable, what about the overall margin picture going forward as far as the profits are concerned?
I do not think anybody can predict margins going forward in any industry. It is just not possible. There are so many variables which are there and the world today is not a very predictable place. The number of changes and unexpected events which happen are enormous. So I mean, I am not at all capable of predicting futures and margins.

Let us talk about chip problem. When last year you suffered chip problem it was a serious problem that time. What about chip problem going forward, last in a way, it led to loss of many units. What about this year? Will it be as grave as last year or are you seeing an improvement when it comes to the problem with chip or semiconductors?
Our expectation is that 2023-24 will be better than 2022-23 as far as chip availability is concerned. However, this first quarter of this year is still not showing that improvement. But we do expect that from the second quarter onwards there will be an improvement in the chip situation.

Talking about electric vehicle road map, you said that by 2036 more EVs would come. Can you throw some light on your partnership with Toyota as far as far as EVs are concerned or hybrid vehicles are concerned, and will you partner with other Indian or global manufacturers when it comes to electric vehicles?
We do not have a partnership with Toyota. The partnership is between Suzuki Japan and Toyota Japan but as a consequence of that partnership in Japan, in India we have this system where not only does Suzuki pass on technology and other things from Toyota to us but Toyota vehicles manufactured in India and Suzuki vehicles manufactured in MSIL, there is an exchange of vehicles in the sense that they buy our vehicles, we buy their vehicles and that is how we get their vehicles.