Maruti Suzuki expects that car exports to witness a downfall in FY 2012-13

Saturday 07 April 2012, 10:57 AM by

Maruti Suzuki India Limited (MSIL), the largest car maker of India, reported on 5th April 2012 that its overall exports may remain slow in Fiscal Year 2012-13 as the international automotive market is not showing progress.

Maruti Suzuki expects that car exports to witness a downfall in FY 2012-13 | CarTrade.com
Maruti Suzuki expects that car exports to witness a downfall in FY 2012-13

At Hero Mindmine Summit, R C Bhargava, Chairman, MSIL, said, "Export will not be better in this fiscal. It will remain more or less the same as last year or may be even worse. Situation in many global markets has not improved yet."

During the previous fiscal, the export figures of MSIL were recorded as 1, 27,379 units, which showed a downfall of 7.9 per cent as compared to records of the previous financial year. The company is engaged in exporting vehicles to auto markets in Latin America, Europe, Middle East and South East Asian countries.

On the other hand, the manufacturer is expecting that its total sales for fiscal 2012-2012 will rise by 10 per cent, which will be primarily increase due to the sales of diesel engine cars. On this Bhargava further added, “We are expecting 1.5 lacs more diesel car sales while the sales of petrol will be down by 50,000 units in the entire year. So, overall, it is likely to be a gain of 1 lacs units.”

The overall sales of MSIL for FY 2011-12 reduced by 10.8 per cent, amounting to 11,33,695 units on Year over Year (YoY) basis, since it sold 12,71,005 units its sold last fiscal.

Stating his views over the challenges which the company will face in the current financial year, Bhargava said, “The main challenge is the fuel cost. The relative prices of petrol and diesel are going to determine the future of the market. Auto companies are guessing what the prices will be for petrol and diesel in future."

In order to increase its diesel engine capacity, MSIL is planning to establish a production line worth Rs. 1,700 crores by the end of 2014 at its Gurgaon manufacturing unit. However, the company will reduce its car assembly capacity at this plant. In lieu of this, he said, “We will shut down one car production line out of the three we have now. Currently, we have a total installed capacity of 7.5 lacs units per annum and we will close down one plant of 2.5 lacs unit capacity. This will happen only by 2015 when the Gujarat plant will come up.”

Bhargava further stated that company requires space for machinery, especially to manufacture diesel motors. In addition, it aims to cover its production loss at the Gurgaon unit at its plants in Manesar and Gujarat.