Maruti to focus on local demand

Maruti Suzuki has indicated that its current focus will be more on how to meet the growing domestic market in a capacity-constraint situation. As such, it is less inclined to grow its exports significantly this year.

Putting the peculiar predicament of Maruti Suzuki in perspective, R. C. Bhargava, Chairman, said, “This year we have decided that we will not grow our exports beyond last year's level due to lack of capacity. We intend to do the same level as last year.”

Maruti Suzuki's passenger car exports grew by 38 per cent to 40,437 units during the first quarter of the current fiscal when compared with 29,314 units. Its A2 (compact) segment products (comprising Alto, Wagon-R, Zen Estilo, Swift, Ritz and A-Star) alone contributed about 37,490 units to the total exports of April-June 2010 quarter. Last fiscal, Maruti achieved the highest-ever export sales at 1.48 lakh units.

Mr. Bhargava was here to attend the annual general meeting of Polaris. He is a director on the board of the company.

Mr. Bhargava said capacity constraints were affecting company's sales volumes.

Despite jump in production numbers, almost all models were facing different waiting periods, he said. “Swift Dezire is facing the longest waiting period among our models,” he added.

The company, he said, was doing make-shift arrangements (through de-bottlenecking and by putting up manual lines) to drive up the production volume. “This has helped us record good sales in the first quarter. Our capacity expansion programme is expected to get completed by early 2012. We will try and do something earlier to boost production,” he added.

The company is putting up additional capacity of 2.50 lakh cars per annum at Manesar in addition to the current one million car capacity.

On growth projections, he said: “I don't think the automobile industry will grow by 25 per cent this year.” He felt that a 12-14 per cent growth target would be a realistic assumption.

On the slew of new launches by car makers, he said that every manufacturer would have to do that. “That is the way the industry is growing. Every company is worried about constantly giving something new to lure customers,” he added.