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September 2, 1999


Maruti's August sales at all-time high; joint ventures with vendors planned

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Byas Anand in New Delhi

Maruti Udyog Limited, India's largest car-maker, has recorded the highest ever passenger car sales of 35,978 units during August 1999 as against 35,407 units in July. In addition, the company has recorded about 20 per cent growth during the first five months of the current fiscal over the same period last year.

Maruti has also clocked an all-time high monthly sales for the Maruti 800 by selling 18,735 units as against the previous best of 18,537 units in January 1997.

Sales of the Omni clocked 7,767 units during August, another all-time high as compared to a previous best of 7,503 units in July 1999. The Maruti Zen sales also surged past previous records to touch 7,971 units as against 7,881 units in July.

During the current fiscal, sales of the Maruti-800 increased by about 16 per cent from 71,312 units last year to 82,568 units this year. Sales of the Omni grew by about 40 per cent from 24,433 units last year to 34,184 units this year, and that of the Zen grew by about 19 per cent from 28,087 units to 33,388 units.

MUL's new managing director Jagdish Khattar has chalked out a blue-print for the country's largest car-maker that targets a Rs 100 billion turnover by 2001, picking up stake in critical component makers and expanding the dealer strength by 33 per cent to 200-strong network by the end of this fiscal.

''We already have around 150 dealers in place and expect to raise it to 200-odd dealers by the end of 1999-2000. Besides, we are also expanding our presence in the rural pockets of the country,'' Khattar said.

The strategy is aimed at improving its presence in every nook and corner of the country. The markets would be categorised according to the population and average income. The idea is to initiate more competition in these areas where the disposable income generally comes from agricultural or business activity, he said.

Besides, it is also planning to pick up equity in its select component manufacturers as part of the growth strategy. ''Though no particular vendor has been finalised for the purpose, we are looking at the idea. We have set up joint ventures with vendors in the past as well and this exercise is just a step to help the vendors grow with the company.''

The idea, he said, is to support the vendors in their expansion programmes by strengthening them financially.

The company is also confident of improving sales and touching a total vehicle sales figure of 400,000 by the end of the current fiscal as against around 330,000 units in 1998-99. ''We expect to end 1999-2000 with a turnover of a shade below Rs 90 billion.''

As part of its attempt to increase penetration in the rural and semi-urban markets, Maruti is now all set to drive into the Andaman and Nicobar Islands. The company has already initiated efforts to put in place a dealership at Port Blair.

Besides, the company has also advertised for setting up dealerships in several cities across the country, which include Moga, Sirsa in Bihar, Akola, Amravati and Satara in Maharashtra and Thirur in Tamil Nadu. With this, Maruti's dealership network will be present in over 130 cities.

''Our endeavour is to move closer to the customers and in this, extending the reach of dealerships in hitherto unrepresented markets will be very critical. This will increase focus on the semi-urban markets,'' Khattar said.

MUL has also decided not to phase out any of its existing vehicles despite new introductions over the next one year. The decision to this effect was taken in view of the surging demand for all its existing vehicles, Khattar said.

''We will not phase out any product till the demand for that product is alive. As long as the product is viable for the vendors and the company and till there is customer demand for the car, why should we phase out the model?''

Referring to the Maruti 800, which is the oldest car in the company's stables, Khattar said, around 200,000 units of the car have already been sold and demand for the vehicle is still pouring in. ''So, there is no question of taking it off the shelves.''

The M-800 is priced at Rs 185,000 of which a major percentage is on account of taxes, octroi and excise. The basic production cost of the car would be close to Rs 125,000.


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