Maruti eyes new vistas to check losses, sustain growth

Our Corporate Bureau

Hyderabad, Sept 20: In a major strategic move to arrest falling margins and to sustain continuous growth over the years, automobile major Maruti Udyog Limited (MUL) has proposed four new avenues of business and expects to break even during this fiscal.

According to MUL managing director Jagdish Khattar, the new avenues include, buying and selling of old (pre-owned) cars, leasing and fleet management, insurance brokerage and financing the customers.

Addressing reporters here on Thursday, Mr Khattar said the company would soon consider entering into buying old models and resell them in the market, after they are fully refurbished. “We find it is one of the better proposition for future growth,” he said.

Mr Khattar, who was in Hyderabad to inaugurate a new showroom of Mitra Agencies, said that the company is working out with major corporates for a three-year leasing agreement, apart from providing entire maintenance and services during the time at a rate lower than the normal monthly maintenance cost of a vehicle, he said.

Corporates will also be given an option to buyback the car, or the new one, during the period. “The company is working on the rates and rules for such service and we expect to finalise it very soon,” he said.

In order to improve customer relationship, MUL would enter into a tie-up with some insurance agents, or brokers, to issue the insurance cover instantaneously at the time of purchasing the car, he said. In its effort to provide one-stop-shop service to the customers, MUL is talking to registration authorities in the respective states to provide on-the-spot registration numbers, apart from providing finance, accessories and other value-added services.

“Though the company had reported a loss of Rs 265 crore last fiscal, with our new efforts and value-added services, Maruti is expected to breakeven this fiscal,” he said.

To a question on the depressing trend in the automobile sector, he said, “Our efforts would be to have over 60 per cent market share and continue to maintain the same for ever.” He also ruled out phasing out 800 models, since it has major potential at the entry level, he said.

We have invested over Rs 2,000 crore in a span of two-and-half-years time to improve our technology, engine, new models, network expansion and capacity expansion.