Maruti Suzuki India Limited, the largest car maker in the Indian market, said on Tuesday that it is considering taking cost effective measures to counter the effect of fluctuation of Japanese Yen on its margins. It is to be mentioned here that there has been continuous fluctuations in the Japanese Yen after the recent devastating earthquake and tsunami.
In a statement given to PTI, Maruti Suzuki India (MSI) Chief Financial Officer Ajay Seth said, "For this month, we are completely protected. In fact, we are covered till April. Beyond that if Yen continues to appreciate, then we will have to take a call to counter it." According to him, MSIL’s margins are affected whenever the yen appreciates, while a depreciating Yen is beneficial for the company.
According to Mr. Seth, post the devastating earthquake and tsunami on March 11, there is strong volatility going on at present, with yen appreciating as much as to 76 yen against a dollar recently. He said that about 25 percent of the company’s total raw material procurement is imported. And out of these imported parts, more than 80 percent of the parts are purchased in Yen. Thus, a continuous volatility in yen Can badly affects the company’s margins.
