Japan stands as one of India’s largest foreign investors, contributing billions of dollars to various sectors like infrastructure, startups, and manufacturing. However, one major investor from Japan might not be what people expect. It’s not the Japanese government, nor well-known brands like Toyota, Sony, or Softbank. Instead, it’s Maruti Suzuki India, one of India’s biggest publicly listed companies. With a market valuation of over $49.26 billion, Maruti Suzuki ranks as the 17th largest company in India, surpassing renowned Indian firms such as Adani Enterprises, Hindustan Aeronautics, Wipro, and Tata Steel.
So, how significant is Maruti Suzuki in India, and how did it become one of Japan’s most vital investments in the country? To understand this, let’s look at its journey.
Maruti Suzuki, a leading name in Indian automobiles, traces its origins to February 24, 1981, when it was established as Maruti Udyog Ltd., a government initiative to produce affordable cars for middle-class Indians. At the time, it competed with two other state-run companies—Premier Automobiles Ltd., known for the Premier Padmini, and Hindustan Motors Ltd., makers of the Ambassador.
Initially, Suzuki had only a minor stake in Maruti Udyog, but things changed dramatically on October 2, 1982, when they signed a license and joint venture agreement with Suzuki Motor Corporation. This partnership led to the launch of the iconic Maruti 800 in 1983, a fuel-efficient car that quickly became a hit on Indian roads.
The company’s first manufacturing facility was set up in Gurgaon, Haryana, where it initially imported fully-built cars from Suzuki. By December 1983, Maruti Suzuki began using locally sourced parts, with models like the Suzuki Alto and Maruti 800 becoming incredibly popular.
By 1986, Maruti Suzuki had produced its 100,000th vehicle and launched a new version of the Suzuki Alto. That same year, the company began exporting cars, with the first batch going to Hungary.
India’s economic liberalization in 1991 accelerated Maruti Suzuki’s growth. Suzuki increased its stake, making Maruti a 50-50 joint venture with the Indian government. During this time, many foreign automakers entered India, intensifying competition. In 1994, Maruti Suzuki produced its 1 millionth vehicle and launched 24-hour on-road emergency services, further improving customer experience.
The early 2000s marked a new phase for Maruti Suzuki. In 2000, it became the first Indian car company to set up a customer service call center. Suzuki’s stake in Maruti rose to 54.2%, and the company went public in 2003, getting listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). By 2007, Maruti Suzuki was renamed, and for the first time, Suzuki sold more cars in India than in Japan. Maruti Suzuki shares surged since their 2003 IPO, outperforming Suzuki’s shares in Japan.
According to an article in the Edmonton Journal, Suzuki’s chairman, Osamu Suzuki, became interested in India after hearing about the government’s search for a car-making partner. This led to the establishment of Maruti in 1982, with Suzuki initially acquiring a 26% stake. This turned out to be one of Suzuki’s best business decisions, as the company sold its 10 millionth vehicle in 2012 and held a 45% market share by 2014. By 2015, production reached 15 million units.
Today, Maruti Suzuki remains a giant in the Indian automotive market. As India’s largest passenger car manufacturer, the company is credited with igniting India’s automobile revolution. In the financial year 2023-2024, Maruti Suzuki reached a new milestone, surpassing 2 million units in total annual sales. The company also maintained its position as India’s top exporter of passenger vehicles for three consecutive years, contributing 41.8% of India’s total passenger vehicle exports. In total, Maruti Suzuki sold 2.1 million vehicles, with the domestic market accounting for 1.8 million units, and exports reaching 283,000 units. The company’s net sales amounted to approximately $16.6 billion, making it one of India’s largest corporations.
Maruti’s exports play a crucial role in India’s balance of payments, with vehicles being shipped to over 100 countries. South Africa, Chile, and Ivory Coast are among the top destinations for these exports.
The company operates two modern manufacturing facilities in Gurugram and Manesar, Haryana, with a combined annual production capacity of 1.5 million units. Another facility in Gujarat, operational since 2017, brings the total production capacity to 2.25 million units per year. To meet future demand, Maruti Suzuki is also building a new plant in Kharkhoda, Haryana, with plans to reach a production capacity of 1 million units annually in the next eight years, requiring a $2.2 billion investment.
The total expansion plan, including two new facilities, is expected to cost over $5.5 billion. The company aims to boost exports and increase its market share locally. Additionally, Maruti Suzuki has a state-of-the-art R&D center in Rohtak, Haryana, with a 600-acre facility built to global standards.
Looking ahead, Maruti Suzuki is venturing into electric vehicle (EV) production. By 2030, Suzuki plans to introduce six EV models in India. The first, based on the eVX concept, is expected by 2025, with five more models to follow. Suzuki anticipates that by 2030, internal combustion engines will still dominate the market, accounting for 60% of sales, while hybrid electric vehicles will make up 25%, and fully electric vehicles will constitute 15%.
Maruti Suzuki’s importance to India’s economy cannot be overstated. As the company that sparked the nation’s automobile revolution, it holds a unique place in history. Economically, it plays a critical role with over $16 billion in annual sales and significant contributions to exports, helping improve India’s balance of payments. As India’s 17th largest company by market capitalization, Maruti Suzuki is undeniably one of the country’s economic powerhouses.