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| Maruti to limit exports, focus more on domestic market |
| Press Trust Of India / New Delhi Aug 22, 2010, 00:41 IST |
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Faced with increasing competition in the domestic market, Maruti Suzuki India is mulling limiting exports to 15 per cent of its total output to meet requirements within the country.
“Maruti Suzuki, as a company, should perhaps deliberately not attempt to export a large part of its production, but keep exports at about 15 per cent of output,” Maruti Suzuki India (MSI) Chairman R C Bhargava wrote to shareholders in its annual report for the year 2009-10.
During the April-July period, the company’s exports stood at 50,558 units, which is about 15 per cent of the total output of 335,394. For FY10, MSI exported a total of 148,000 units. “We should concentrate more on the domestic market. To keep our market share, not only should we adequately increase manufacturing capacity, but also remain aware of the changing customer taste and demand and be flexible in making quick adjustments,” he added.
MSI currently has two plants, at Gurgaon and Manesar, which have a combined capacity of one million units annually. For the first time since it started selling cars, the company saw its market share drop below 50 per cent this financial year. According to the Society of Indian Automobile Manufacturers (SIAM), the market leader sold 282,488 cars during the April-July period, representing a 47.68 per cent share in the overall 592,405-unit market.
In the comparable year-ago period, MSI had a 53.13 per cent share of the 440,069-unit market, with sales of 233,811 units. The firm is losing its share to Tata Motors, Ford India and General Motors India, who are catching up following a good response to their respective small cars — Nano, Figo and Beat.
Bhargava also said the company needed to scale up its research and development (R&D) capabilities for faster launches and face-lifts in the Indian market. “We need to rapidly develop our own capacity to design products. This is an area of priority for us and with the help of Suzuki, we are investing heavily in research and development,” he said.
Expressing similar sentiments, MSI Managing Director and CEO, Shinzo Nakanishi, said: “Once our R&D centre at Rohtak comes onstream, we will have enhanced capability to test and evaluate. This will provide us speed and flexibility in launching new models and face-lifts in India.”
MSI had increased its spending on R&D to Rs 173.3 crore in 2009-10 from Rs 91 crore in 2008-09.
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