Maruti scales up export target by 8%

Written by Yogima Seth | Rishi Raj | New Delhi | Updated: Sep 22 2009, 07:23am hrs
Buoyed by the growing demand for smaller cars in Europe and other developed markets because of the scrappage incentives being offered there, Maruti Suzuki India has increased its export targets by nearly 8%.

The company is looking at exporting 1,30,000 cars in the current financial year, which would be higher than earlier envisioned, RC Bhargava, chairman, Maruti Suzuki India, told FE. There could be higher demand from Nissan as well and the company is expected to sell 53,000 to 54,000 units of A-Star, which are being sold as Pixo in Europe, as against the earlier order of 50,000 units, he added.

At the beginning of 2009-10, Maruti Suzuki had set a target of exporting 1,20,000 cars, out of which nearly 1,00,000 would have been the A-star variant. The company exported 70,000 cars in 2008-09.

According to Bhargava, till last year Maruti Suzuki had no car for export to Europe, which is big market for small cars. It was only when the company launched A-Star and started its export from January this year that the company is eyeing nearly 85% growth in the exports figure this year vis--vis last year.

However, the government needs to improve infrastructure as well as speed up the process of export to help Indian manufacturers become more competitive compared with the overseas players, if not give any export incentives, he said.

Maruti Suzuki India, which has posted around 17% growth over the last three months, is eyeing similar numbers in the next three months as well on the back of festive demand. The 4% excise duty cut in the first stimulus package helped in reviving customer sentiments but I dont think it would be prudent to say that we are out of the woods. In fact, one has to be cautious and conservative to wait and watch how things evolve post the festive time, Bhargava added.

However, the companys biggest challenge as of now is to get its research and development (R&D) going. We have invested Rs 1,000- 1,500 crore in the new R&D facility and test track coming up in Rohtak, Haryana. We are also in the process of increasing manpower to 1,000 by 2010 from over 700 now as this centre will help India play a major role in designing future models of Suzuki, he said.

According to Bhargava, it would only be in 2015 that one can expect a complete Made-in-India car from the stable of Maruti and the R&D centre would provide infrastructure for the same.

Sales of Maruti Suzuki India went up 29.3% in August at 69,961 units while the overall passenger car industry grew 22.4% at 1,52,100 units last month.