Maruti Suzuki takes key vendors to Dubai meet to plan new segment entry

Written by Roudra Bhattacharya | New Delhi | Updated: May 2 2014, 06:29am hrs
MMaruti has invited select vendors based on their turnover and ranking over the past few months. Reuters
Leading carmaker Maruti Suzuki India has invited its top vendors for a three-day meet in Dubai to discuss business targets and unveil plans to enter new vehicle segments to protect the market share (42% of the 25-million unit vehicle market) from rivals over the next few years. Scheduled for May 6-8, the annual conference will include awards for the best-performing suppliers of the previous year.

Maruti has invited select vendors (about 130) based on their turnover and ranking over the past few months. The conference, usually attended by top two executives from each supplier, is critical to build a stronger understanding between the manufacturer and suppliers, said a source.

A senior executive with a Maruti's leading vendors said, We expect significant insights into what the company plans in terms of marketing and product strategies for next few years. A Maruti Suzuki spokesperson confirmed the supplier meet in May, adding it is an annual affair.

Maruti, which has over 300 tier-1 suppliers, had in May last year held a similar conference at Kuala Lumpur in Malaysia, where it told vendors that the Rohtak R&D facility will progressively become Suzuki's base to develop compact vehicles for emerging markets in Africa and Southeast Asia.

Most automakers take vendors abroad for the suppliers' meets. In August 2013, Tata Motors invited over 300 vendors to Macau, while Hero MotoCorp and Hyundai took their vendors to Russia in last few years.

With car sales growing at its slowest pace in over a decade, a 4.6% fall in FY14 at 17.8 lakh units, suppliers have been immense pressure to cut costs. Moreover, a fall in demand had shown the investments made by vendors over last few years were taking longer to show returns. Thus, the meet is key for suppliers to understand Maruti's plans for next few years and allocate capacity accordingly.