This would be Suzukis first investment in Maruti Udyog after taking majority stake and management control of the company in addition to subscribing to the entire rights issue.
Looking Ahead: Suzuki CEO Osama Suzuki with power minister Suresh Prabhu and disinvestment minister Arun Shourie after presenting a cheque of Rs 1,000 crore in New Delhi on Thursday
(FE Photo by Raaj Dayal.)
Our investments will not change and we will continue to implement what was decided earlier. This year we will invest in die-cast foundry and continue to launch one model every year as an average life of a model is 5-8 years, he said.
Disinvestment minister Arun Shourie, who also attended the function, said disinvestment process in general and privatisation in particular would get a big boost with the developments at Maruti.
He said Marutis divestment also restores trust between the government and SMC, leaving behind the dark clouds. Addressing Mr Suzuki, Mr Shourie said Our wealth is in your hands. You will have to convince the Indian investor that Maruti will be an even better company in the future.
Mr Suzuki said that Maruti Udyog would remain an Indian company with no change in its status, but did not divulge the details of new models saying, just wait and watch.
Suzuki said MUL has been able to indigenise the gear-box technology by 70 per cent over the last few years.
Jagdish Khattar, who has been retained as managing director of Maruti by SMC, said the die-cast foundry would be set up at Manesar with investments between Rs 200-250 crore and pointed out, preparatory work for the foundry has been completed, and will be implemented within 12 months. A part of the proceeds from the rights issue would be used for the die-cast shop.
India has one billion people and I hope that this successful partnership between government and Suzuki from now should change its objective, said Mr Suzuki.
Hinting at a need for attractive excise tax policy for small cars, Mr Suzuki offered a car for every Indian family if the government came out with favourable policies.
He said, From today our responsibilities to Marutis management and customers will increase and we would be more responsible to the growth of Indian automobile industry and Indian economy.
Acknowledging the long time taken on disinvestment, he stated that the negotiating team of the Indian government was very tough and focussed.
However, congratulating the Indian government in the development and growth of Maruti, he said, When a good partner decides to exit from any joint venture, we believe that it should be the other partners role and responsibility to maximise the return on the investment as an expression of our thanks to the fruitful partnership. Maruti Udyog will remain an Indian company, he said, adding, We have requested Mr Jagdish Khattar to continue to manage as managing director.
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