Maruti unveils global ambitions

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: Jan 6 2012, 09:31am hrs
As part of the joint-operations between Maruti and its Japanese parent firm, Suzuki Motors, the country's largest car maker could launch up to three global products by 2017. These models would be manufactured in India and exported to the overseas markets.

It will all depend on Suzuki's global strategy. But in the next five years, it is possible (that we may launch two or three models that would be exported), managing executive officer (engineering) of Maruti Suzuki IV Rao told FE. As per Suzuki's strategy, the company is considering joint product development at its research and development wing in Japan.

On Thursday, Maruti showcased its compact sports utility vehicle XA Alpha, which has been co-designed by Suzuki and Maruti engineers. According to Maruti Suzuki's CEO and managing director Shinzo Nakanishi, five engineers from Maruti had helped in the development of the concept car. Though the company is yet to take a call on its commercial viability, Maruti said that a final decision would be made after gauging the customer response to the model.

According to Nakanishi, the SUV and MUV segment constitutes about 14% of the overall car market in India. To sustain our leadership position in the car market, we have to introduce something in this segment, said Nakanishi.

Meanwhile, on the back of a relentless depreciation in the rupee, Maruti Suzuki is

considering hiking price of its vehicles, managing executive officer (sales & marketing) Mayank Pareek said.

Company sources said that owing to a sharp fall in rupee, the company's royalty outgo could be as high as 20%. CFO of the company, Ajay Seth, said that Maruti has internal economists who are trying to understand the volatility of the currency. It was only in November last year that the company had increased prices of its vehicles up to R10,000.

The company also expects its 2011-12 sales to decline owing to the loss of almost 1 lakh units because of labour trouble. In the April-December period, the company's total sales declined over 16% to 7.73 lakh units. Apart from that, factors such as rising interest rates and fuel costs have caused a decline in sales.

The company expects its exports to touch around 1.25 lakh units in FY12 against 1.47 lakh in the previous fiscal.

Nakanishi also said that while the deal with Fiat for sourcing diesel engines would commence from month end, it is only stuck because of pricing issues. Earlier FE had reported that Tata Motors, which owns 50% in Fiat India, has cleared the deal.