Does Suzuki Have a New “Long Term Game Plan” for MSIL?

Maruti Suzuki India Limited sells every second car in India. It also contributes to nearly 80 percent of Suzuki’s profits. MSIL has also surpassed its parent company in sales tally last year making it one of the biggest players in the small car segment not only in India but also on the global level.

According to the recent report, Suzuki has acquired 0.8 percent more stake from “secondary market purchase” in Maruti Suzuki India Limited making its holdings up to 55 percent. An official statement stating the same is still awaited on MSIL website or from the company spokesperson. An official statement stating the changed stake holdings will be presented before the board at the statutory board meeting scheduled for the third week of April. Companies in India can make creeping acquisitions in India up to 5 percent in a year. However, if Suzuki intends to acquire more holdings in the company beyond 55% it will have to make an open offer for another 20 percent.

Industry experts and market watchers expect this to be Suzuki’s long term strategy for the Indian market where the company intends to gain full control over India’s largest car maker. “There’s no reason why Suzuki would want (it) ... unless it has a ... larger game-plan lined up,” one former Maruti official said. Moreover, Suzuki-Volkswagen is also planning an Indian specific plan to penetrate deeper in to the market.

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