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US attacks, weak Re may hit Maruti net: Khattar

BS Bureau

The events since September 11 together with the depreciation of the rupee, is causing concern to the country's largest car manufacturer, Maruti Udyog, managing director Jagdish Khattar said.

Khattar said that Maruti had hoped for a breakeven this year after last fiscal's losses "but we are sitting with fingers crossed now".

"Normally, this time of the year, sales should have picked up. But there are no signs of that happening as yet," he added.

The chief executive asserted that the import content for his products was quite low, "but at our production volume of nearly 400,000 vehicles a year, even a small percentage of imports in the current situation of the depreciating rupee will hit our bottomline," he said.

While Maruti 800, Esteem and Zen have less than 10 per cent of import content, for the new models it is around 20 per cent "and this is of concern".

In this situation, Khattar said, Maruti has no option but to speed up its foray into new business -- buying and selling pre-owned cars, leasing and fleet management, insurance and finance.

A separate division within Maruti Udyog will be set up for pre-owned car business while the plans for leasing were now being finalised and would be launched "very soon".

Khattar said the leasing will give a big push to the car business. The leasing period will be of three years as is vogue in the US and during this period the entire maintenance will be done by the dealer. At the end of the three year period, the lessee will have the option to pay the balance and purchase the car or surrender the same. "Broad outline has been worked out and we are fine tuning the details," he said.

Khattar claimed that his brand remained the dominant one in the domestic car market. While for the first five months of the current fiscal the passenger car segment of the domestic automobile industry registered a two per cent negative growth, Maruti registered a 12 per cent growth. "We shall still strive for a market share of 60 per cent this year," he said.

...lines up 2 'Versa' variants for Oct launch

Maruti Udyog is likely to launch two variants of its forthcoming multi-purpose vehicle, 'Versa', and has targeted to sell 10,000 units of the vehicle this fiscal, a top company official said today.

"We are currently looking at launching two variants of the Versa, one standard version and the other a luxury version," Junzo Sugimori, director, marketing, said.

He said the vehicle, to be launched by October-end, will have an initial localisation content of at least 70 per cent.

"In the remaining months of this fiscal, we want to sell 10,000 units. Next year, we want to maintain the same pace of growth," Sugimori said.

The company will roll out the eight-seater Versa, a luxury MPV in the Rs 600,000-700,000 price bracket for which it has invested around Rs 3.50 billion.

The new vehicle, an Indianised version of Suzuki's 'Every' model, would be powered by a 1300cc multi purpose fuel injection (MPFI) petrol engine, the same as that of the Maruti Esteem car. Company officials said the Versa would be pitted in the 'C' or mid-size segment against cars such as Ford Ikon, Hyundai Accent and Maruti Esteem.

Additional inputs: PTI

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