Maruti set to take on Leyland Dost, Tata Ace with three new launches

To protect its over 45% market share in the domestic passenger vehicle segment, India's largest carmaker Maruti Suzuki India on Thursday said it would launch at least two sports utility vehicles (SUV) and a light commercial vehicle to compete with Tata Ace and Ashok Leyland's Dost in the next couple of years.

Addressing shareholders at the firm's annual general meeting, chairman RC Bhargava said the two SUVs would help cater to 29% of the domestic market and plug a gap that has not been exploited by the company yet.

"We are not present in the SUV segment and Suzuki Japan is aware of it," Bhargava said. "Early next financial year, we will launch our SUV that would be followed by a compact SUV a year later. With these we will have sizeable presence in the SUV segment and fill unutilised capacity at Gurgaon and Manesar plants."

The first such vehicle to hit the roads could be the SX4 S Cross — a crossover vehicle based on the company's now discontinued SX4 sedan that was showcased during the auto expo in February.

The compact SUV will be based on the XA Alpha concept model showcased by the firm during the auto expo in 2012.

Maruti also said it would henceforth make royalty payments to Suzuki, its parent firm, in rupee instead of yen to insulate it from foreign exchange currency fluctuations.

"More and more R&D work will be done in India and royalty calculation will be based on work done here...Our expenditures on R&D will be rewarded in the form of reduced royalty," Bhargava said.

In the first quarter ended June 30, 2014, Maruti paid a royalty of ` 689 crore, that was about 6.2% of its net sales.