BackMaruti to pare platforms, product development cycle
The car maker plans to reduce number of platforms, shorten product development cycle
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New Delhi: Maruti Suzuki India Ltd is working towards reducing the number of vehicular platforms and shorten its product development cycle as it seeks to cement its top position in a market where new models are driving sales growth.
Maruti currently sells 16 models on eight platforms.
A platform is the basic structure on which a vehicle is built, which defines its size, strength and body construction.
The plan is to reduce the number of platforms to three or four, C.V. Raman, executive director, engineering, said in an interview last week.
The move will help the local arm of the Japanese car maker to optimize product development costs, get better return on investment and address the growing aspirations of car buyers more effectively.
The adoption of a modular structure, which entails using common parts across models and a more flexible assembly line, will require changes to be made to the company’s plants.
Some of these changes are already being implemented, said Raman, pointing out that it is a complex exercise which would also require component suppliers to be prepared.
“They will need to produce parts that can be used across models in a large volume with a standard specification and consistent quality," he said.
Meanwhile, Maruti is also looking to reduce the development cycle of new models.
“Our model development cycle will change—every six years there will be a new model," said Raman. The development cycle for some of Maruti’s models ranges from eight to nine years.
As part of the plan, over the next five years, Maruti will refurbish its line-up of models, with existing ones being converted into new generation ones.
Some of the ageing models in the company’s portfolio include the Wagon R and Swift, launched in 1999 and 2005, respectively.
Maruti successfully implemented the platform sharing strategy with the Swift and Dzire models and now plans to evolve it further. The new generation platforms developed henceforth will all be global platforms addressing multiple markets.
Baleno, the premium hatchback launched in India in November, is the first of the models that will address multiple markets and geographies. In order to ensure they meet future regulations on fuel efficiency, emission and crash testing norms, the usage of tensile steel will go up, said Raman.
This will add to the structural strength even as it reduces the overall weight and makes cars more fuel efficient.
The reduction in the number of platforms—a trend that has started gaining traction in India, in line with the global markets—is becoming increasingly critical given the frequent facelifts one is required to perform on cars to sustain buyers’ interest, said Kumar Kandaswami, senior leader of manufacturing at Deloitte Touche Tohmatsu India Pvt. Ltd, a consulting firm.
“One can no more afford 10-20 platforms," he added. The concept of platform-to-model ratio, which was unheard of in India till a few years ago, has lately emerged as a new benchmark to assess one’s return on investment, he added.
To be sure, global auto makers such as Toyota Motor Corp. and Volkswagen AG, which have been using fewer platforms to churn out multiple models with varied body types and dimensions, also have aggressive targets to reduce them (number of platforms) sharply.
As against the mature markets, where no single segment drives the market, given the large concentration of hatchbacks in the Indian auto market, it is easier for auto makers in the country to spin off multiple models from a single platform.
As part of a mid-term plan announced on 30 June 2015, Suzuki Motor Co. said the firm will invest in new platforms and consolidate the products into three new lightweight platforms—Mini, A, and B.
Over the last two years, the local arm of Japan’s Suzuki Motor, as part of a stated objective of selling 2.2 million cars in India per annum by 2020. The firm sold 1,292,415 units in fiscal 2014-15 and has been frequently launching new models, variants and facelifts.
These include the S-Cross and Baleno last year and the Celerio and Ciaz the year before. It would be unveiling the Vitara Brezza compact sport utility vehicle (SUV) and the Ignis micro SUV at the auto expo on 3 and 4 February.
Cars sales in India, one of the world’s fastest growing automobile markets, have been advancing at a rapid clip for 14 straight months. The growth is being led by new models as buyers seek newer, better-styled and designed products.
Nitesh Sharma, an analyst at Phillip Capital India Pvt. Ltd, said the move to rationalize the number of platforms will bump up the company’s operating profit margin by at least one percentage point, as it leads to savings in research and development costs and enables the company to spread the costs over a large number of models.
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