Mul Inches Toward Quid Pro Quo Deal

The board of directors of Maruti Udyog Ltd yesterday recommended the renewal of the companys royalty agreement with Suzuki Motor Co without any change in the terms.

The company will now submit its report to the industry ministry for ratification, following which Maruti will begin royalty payments to Suzuki on the existing Maruti 800 and Omni models.

The board also took up the issue of transfer of technology, particularly gearbox technology, for which Suzuki Motor has already submitted a report.

At the end of the three-hour board meeting, MUL chairman P Sengupta said: SMC has already submitted the project report on gearbox technology. The Maruti management will examine this and then find ways and means of implementing the report.

 

Royalty payments on the Maruti 800 and the Omni have been pending since April 1, 1997, owing to the failure of the MUL board to renew the agreement when it came up for review on March 31 last year. The seven-year agreement, valid from April 1, 1994, had a review clause after three years.

Sengupta said Suzuki had already transferred some technology to Maruti and would continue to do so for the existing models. The renewal of royalty is linked to technology transfer, he said.

The MUL board, which met yesterday to complete the unfinished agenda of last Satur-days meeting, discussed technology transfer, advanced fuel efficiency and emission standards, as well as enhanced safety features in MULs models.

A corporate plan to work out the introduction of new models and marketing strategies to tackle emerging competition was also on the meetings agenda.

The board approved the broad outlines of a corporate plan, involving technology upgradation, human resources development and research and development efforts. This will now have to be finalised by the Maruti management and forwarded to the government, Sengupta added.