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Maruti to promote recently launched car models this year

India's largest car maker, Maruti Udyog Ltd, said on Wednesday it would promote recently launched models to reinforce last year's turnaround and fend off competition from global rivals in a sluggish market.

The New Delhi-based automaker, a 50-50 venture of the Indian government and Japan's Suzuki Motor Corp, swung to a profit of Rs 550 million ($11.24 million) in the year to March after a loss of Rs 2.69 billion a year earlier which was partly due to steep launch costs.

"We are going to concentrate on what we launched in the last two years. The more we sell the new models, the better our bottom line will be," Jagdish Khattar, Maruti's managing director, told reporters after a news conference.

Until 1998, Maruti had more than 80 per cent of the domestic car market, but has lost out since to newer entrants such as South Korea's Hyundai Motor and domestic firm Tata Engineering and Locomotive Co Ltd.

Maruti has been fighting back with several new model launches and lifted itself out of losses last year through aggressive cost cutting and sharp productivity gains.

Slated to be privatised later this year, Maruti still has a commanding 59 per cent share of the domestic car market with its small, reasonably priced cars.

Its sales by volume grew 0.51 per cent in 2001-02 to 352,415 vehicles, matching the industry's growth of 0.48 per cent, figures from an industry body show.

Khattar declined to spell out targets for volume growth in 2002-03, but company officials said Maruti would try to maintain its market share.

He said Maruti was also working on a strategy to push sales of its largest-selling model, the Maruti 800, especially in smaller cities and towns. The 800, at around Rs 300,000, is India's cheapest car and makes up nearly a quarter of the country's overall car sales.

He expected the car to retain market share despite increasing competition.

NEW MODELS

Over the past two years, the company launched the 1.1-litre Wagon R and the Alto, in two engine versions, in the country's fastest-growing premium hatchback segment and the 1.6 litre Baleno in the mid-sized family car segment.

But the steep launch costs and higher share of imported parts in the new models contributed to pushing it into loss in 2000-01.

Both the Wagon R and Alto have failed to excite enough buyers since their launch, with their combined sales being less than its third model in the segment, the Zen, which it launched nearly a decade ago.

But Khattar said Maruti would aim to consolidate sales of the new models this year and expected a jump in Alto exports.

"We launched the Alto last month at the Geneva Motor Show and our distributors in Europe placed orders for 16,000 immediately," he said. The orders will be filled over 2002-03, he added.

The Alto is positioned as a second family car in Europe, aimed mostly at women. He said the feedback for the car since its launch had been good. In the Netherlands, it gets a discount of 1,000 euros from the government due to its small size and relative fuel efficiency.

Maruti's exports dropped nearly 20 per cent in 2001-02 (April-March) to 12,230 vehicles. Most of the exports -- Zens -- were mainly to Europe.

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