 Hello and welcome everyone to Exchange for Media Show. We have today with us Mr. Shashank Srivastava, Senior Executive Director, Marketing & Sales, Maruti Suzuki. Maruti is India's largest car maker which is headed towards producing a record number of cars this year, despite inflation and downturn in the GDP growth. Good news for the auto sector and perhaps for the ad industry as well. Welcome to this home, Mr. Srivastava. Thank you. Mr. Srivastava, Maruti is likely to record 25% growth in the current fiscal in I suppose 20 lakh units are likely to be produced this year compared to 16.7 lakh in the last fiscal year. So it's really interesting to know which segment or category is witnessing the highest growth and why? Yeah, so Maruti has always been strong in the smaller car segment. Last year, our market share in the non-SUV space was about 66% which is the highest that we have had for the last 20 years. But the SUV segment is something which we are looking at very closely because our market share in the SUV segment is not so great. We have two products there, the Bresla and the S-Cross against about 47 in the industry. So we need to strengthen that portfolio. So we are looking forward to strengthening that portfolio and we are expecting good numbers to come from this segment. That segment has been growing very fast. As you know, it was just about 26% two years back. It's climbed 40% by 21-22 and this trajectory continues in these two months that we are seeing in the current financial year as well. So auto industry is facing a shortage of semiconductor chips for a long time. So how do you manage to secure your supplies? Yes, so it is actually, we have a very good portfolio of vehicles, 15 in the largest in the industry. We have been making adjustment in our production plan model-wise because different models require different levels of chips and different types of chips, the semiconductor chips. So we have been doing that and quite successfully. So we have been trying to maximize the production with the availability, we are of course talking to our vendors, our suppliers of semiconductor components and trying to improve things. In fact, last September, we could do only 40% of our plan production, but we are now at the level of about 93-95%, which is pretty good. Still not 100% normal and I expect it to continue for some more time before it becomes 100% normal. The exact timeline I'm not able to tell you because it's a very complex global supply chain which is involved and it's difficult to give an exact timeline. You don't have the visibility of semiconductor capacity availability in the global supply chain. And that's the reason why I'm literally apprehensive to give an exact timeline when it will become 100% normal. Mr. Shor sir, when we are talking at present inflation and fuel price in the country, both are at their peak and investors they are tightening their first strings. Many brands are planning to hold their add-spins to cut losses. What would be your addicts be like in financial year 2023, considering the high growth in sales? Yeah, so if you look at the auto expenditure on advertising, I think it's going to increase this year. I would put it in the range of about 15-20%. Last year, auto was almost I think 5,000 crore of the total 57,000 crore expenditure that you saw in the industry. I'm keeping the digital side aside. It's only the main, the traditional media platforms that I'm talking of. So half of it was from car manufacturers. So it would be in the region about 2,000 crores or 1,500 crore types. So I expected 10-15% to 20% growth actually. And the reason why I say this is in the automobile, the advertising expenditure that OEMs do is largely on four factors. One is the sustenance of the current brands. So sustenance is important because you need to continue to generate the demand for existing models. Second, you have new model launches where you need a brand positioning, which also entails a lot of expenditure on ads. Third is on the local level, which you need to convert all those inquiries and hyperlocal as well as into actual sales. That happens largely through print medium, but it is never the large portion. That would continue. And fourth, I think on the digital front, you would have seen that there is a greater traction for personalized advertising that's possible on the digital platform. And that would also increase. So I think all those factors, I don't see a factor where there would be a reduction in ad expenses at advertising. Only a really deep cut in demand can probably spur OEMs not to spend, but I don't see that happening this year. And what about your own ad expenditure, Marupi's ad expenditure this year? Are you going to increase it? Yes, of course. We are 50% of the market almost. So yes, we will be increasing and we have planned that way because we have several new launches. So that launch expenditure, which I was referring to, will have new brands. The sustenance, of course, continues. We have 15 models. So that sustenance will be required. And anyway, our expenditure on the digital platform has been increasing. It's almost now 30% of our overall ad-ex. So on all counts, based on these factors, we have actually kept a higher budget for advertising expenditure this year than what we have done last year. Okay. Can you please tell me the percentage wise, how high it is compared to the last year? So roughly, I would say roughly almost like 30% or so up. Okay. That's really a good number. So I would also like to know the factors behind the sustained growth of the public sector company, Marupi, at the time when companies like Ford, I mean, they are selling their plants due to mounting glasses. So, Maruti is not a public sector company anymore. As you know, we were a public sector company until 2002. For the last 20 years, we are a public limited company because government exited from Maruti Suzuki. I'm sorry. So it was listed in 2002. But of course, we started off as a public sector company. And one of the reasons why we have continued to lead the market, obviously, is because we are a very customer-centric organization. And all our choices, whether it is about product portfolio, about the processes that we establish, the dealerships that we have, the network that we go into, all that is basically centered on the consumer. So we take consumer satisfaction very, very seriously. We measure consumer satisfaction almost at every process point, whether it is customer at the pre-sale stage or during the sale stage or post-sale stage, whether it is insurance or finance or whatever. We measure, we are sort of very, very concerned if there is a drop in our customer satisfaction scores. I think that is one of the reasons why we have continued to dominate the auto industry. The US government has recently introduced a bill in the parliament, I guess, which aims to curb the monopoly of Google and Facebook. So I would like to know from you, as a marketer, how fair their ad selling is in India? Yeah. So I think there is a direct interaction of these companies with the advertisers also. So I think they're fairly, for us, I have not noticed anything really negative about that, because one good thing about digital is that you can measure exactly. The measureability makes the process quite robust. But of course, there are many areas where you can have improvements. And going forward, I think the amount of data that they have is, of course, makes them a very strong parties and platforms to deal with, especially if you are going forward, if you have a cookie-less world, and if the third party data goes missing, then advertisers as well as broadcasters would have to depend on such data as is collected by large organizations, large platforms, especially social media platforms, what we call world gardens. And that I think would become essential part of a strategy of advertising on the digital platform for any large advertising like this. The US will also talk about how Google is actually the seller and the buyer and also running the exchanges and maybe going forward if the law is passed, so they will have to choose just one segment. They can be just one, either exchange or buyer or seller. So do you think that government of India should also bring such kind of legislation? So actually, across the world, these legislation regarding digital platforms and social media platforms have been changing and developing because people really, it's a new field, fast-changing fields, and therefore legislation has not kept pace with the changes. Essentially, the legislation process itself is a slow process, generally speaking, across the world. So yes, you are right, as we see a lot of changes in the way business is conducted in the digital platform, you would see and there is a requirement for legislation to be close to that in this sector. The response time, of course, has to be much more agile than what we have seen across the world in this regard. Since you have very, very small time, so this is my last question, so other car makers have already launched their electric vehicle model in an effort to reduce their carbon footprint. What is stopping Maruti to make EV? Actually, one point which I must tell you is that EV sales last here were just 20,000 in the industry of 30.7 lakhs. So that was about less than 0.4%. And the reason why the large-scale adoption of EV hasn't happened is because the cost of acquisition of EV vehicles is very high, because EV vehicle making has about 55% of the cost is battery cost. And current battery technology does not enable a lower cost of acquisition. That's one big hindrance for the adoption of EV in the country. And second, of course, is the charging infrastructure. Charging infrastructure in our country is not so developed. So it's possible that consumers who have their own garage or a special place where they can charge every night at home, they may be less compared to in other countries. So that is one big issue leading to what we call the range anxiety in customers. They are anxious whether they'll be able to complete the journey on a single charge. So on those two factors is the reason why the adoption of EV hasn't been very large. So it's not really about technology because technology is available, but it's about these two factors of acquisition and also customer convenience. I know the optics look a little bad. But if the choice is between optics and customer convenience, I can tell you, Marti Suzuki will choose customer convenience 100 out of 100 times, because we are customer-centric organization. But of course, there are manufacturers who will showcase it as a technology, not necessarily for environment, because they continue to sell large diesel cars. So it's not really good for the environment. So it's not necessarily environment or showcasing, but we are really looking at something which can make a big difference to the environment and customer convenience. And that is why you would have seen that we have not immediately launched EV, but we are in the process of EV development and we should, by our estimates, by 2025, before we should be able to launch the EV vehicle also. This is a very good news. Thank you, Mr. Shwasa, for talking with us and taking time out. Thank you very much. Thank you.