Maruti Suzuki Scale Operations For Shared Mobility — Developing Tech And Cars For Cab Aggregators

Maruti Suzuki India Limited and it's parent company Suzuki Motor Corp. are scaling up, and developing a multi-pronged strategy to exploit the shared mobility industry. They also want to offset an impact on sales of personal vehicles.

According to livemint, Both companies plan to invest in start-ups in India. They want to develop software solutions for the shared mobility industry that involves both drivers logistical commercial segments. Maruti Suzuki has set up a mobility technology department works on development of vehicle models used by cab aggregators. The department is headed by Rachapudi Srihari who used to be the Nation Customer Relationship Manager at Maruti.

In an effort to support Maruti's plans and venture, Suzuki has has opened an office in Bangalore. The office will deal with various start ups in the mobility space. Suzuki has also moved some of it's assets from Silicon Valley in the United States to their new office at Bangalore.

Automobile manufacturers are expanding strategies just as fast as the shared mobility market is booming. They say that the shared mobility market will impact sales of personal vehicle in the near future. This will happen in cities that have road congestion, higher car prices, and limited parking spaces.

Manufacturers are investing in cab aggregators like Ola and Uber in India. They are also developing vehicles that are suited for shared mobility including electric and hybrid vehicles. South Korea based Hyundai Motor Group recently announced an investment of $300 million in India's biggest cab aggregator, Ola.

The deal between Hyundai Motor Group and Ola involves both Hyundai Motor Co. and Kia Motors Corp. to work closely with the Bangalore based start up to develop customized electric vehicles and charging stations. This was followed by a Rs 100 crore investment made by Hyundai last August in the car sharing platform Revv.

Maruti's long term goal is to offer end-to-end solutions in the shared mobility industry. "Maruti, like some of the other auto makers, has understood the importance of offering mobility solutions directly to the customers. In India, these concepts are at a very nascent stage, but one has to prepare for the future. The other manufacturers have also been doing the same and Hyundai's investment in Ola Cabs is an indication.", said one individual who is aware of the current plans and strategies.

Puneet Gupta, Associate Director, Vehicle Forecast (South Asia) said, "The steps taken by Maruti in the shared mobility segment underscored the company's ability to transform itself in line with changing market conditions. Fifteen years back, Maruti Suzuki started with new initiatives like entry into used car business, insurance, fleet and accessories business. All of these have been game changers for Maruti Suzuki in the last decade and helped Maruti Suzuki not only maintain their leadership position, but also capture more than 50% market share today. Similarly, we feel Maruti Suzuki's entry and dedicated focus in areas like mobility, EV business would be game changers in the coming years."

The gradual increase and future forecasts show that there are more people opting for shared mobility. Manufacturers feel this will effect global sales of vehicles. However, they say that car sales in developing countries are expected to outpace the impact over the next 15 years. They say by 2030, they will lose one-third of global sales to the shared mobility industry.

"Most manufacturers are looking at startups now, but there is risk association with this, since one has to bet on the right startups so that the investment or the association yields value. Hence, a separate division is needed for such projects. Hence Suzuki's decision to station some of its people in Bengaluru also makes sense," said another individual aware of the company's plans and strategies.

Thoughts About Maruti Suzuki's Plans For The Shared Mobility Industry

Interesting thought. It makes sense though. If people use shared mobility and use cab aggregators more, sales of personal vehicles will take a hit. The real question is how much of a hit? We all know folks who own more than one car but still pool-it to work and back. Either way, the insight Maruti has is brilliant.

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Read more on: #maruti suzuki
Article Published On: Monday, April 29, 2019, 15:53 [IST]

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