Maruti Suzuki to halt shipments to Europe, exports to dip 10 pct

Written by Roudra Bhattacharya | New Delhi | Updated: Mar 19 2014, 07:24am hrs
MarutiMaruti Suzuki will stop exporting to Europe, its single largest overseas market, for over a year starting in the April-June quarter. Reuters
Maruti Suzuki will stop exporting to Europe, its single largest overseas market, for over a year starting in the April-June quarter, reports Roudra Bhattacharya in New Delhi. Industry sources told FE the move will lead to a dip of around 10% in its total exports for the next fiscal Maruti will restart European exports after a 15-month gap in September 2015 with a completely new model, likely the YRA premium hatchback.

European exports for the market leader will come to a halt because it will stop exporting the A-Star after the last consignment of about 15,000 units is despatched in the next quarter. While production of the

A-Star has been stopped in India, Marutis Japanese parent Suzuki Motor Corporation has decided to source the A-Stars replacement model Celerio from its Thailand plant instead. The Celerio is being exported to Europe from Thailand because there, Suzuki will make the Euro 5 model that is needed as per European regulations, compared with the Euro 4 model being made in India. In the last few years, the A-Star was the only model exported by Maruti to Europe, an industry source said.

With Europe accounting for about 30% of Marutis around 1.2-lakh-unit annual exports, the move is likely to hit the companys overall export strategy. But the company, however, remains hopeful of offsetting the loss by developing other markets in Africa, Southeast Asia and South America.

With the Celerio exports happening out of Thailand, there will be a small hit in FY15, but we will try to make up with expansion of exports to other regions, a company official said. In FY13, Maruti had exported about 24,000 units to Europe a fifth of its overall 1.2-lakh-unit exports.

European exports in FY14 have risen 25% in FY14 to around 30,000 units, though its overall exports volumes have fallen 17% (to 90,271 units in April-February FY14). Marutis total domestic sales in FY13 was up 4.4% to 10.51 lakh units, while in April-February FY14 it is up about 2% to 99,758 units.

Maruti currently exports to over 125 countries, though for the last few years, it is slowly shifting its focus from Europe towards the more emerging markets like Algeria, Egypt and Indonesia. In fact, parent Suzuki which owns over 56% stake has lately given Maruti the task of developing products and expanding production into markets in South-East Asia, Africa and South America. The company is now considering setting up manufacturing and assembly plants in several overseas markets.