Recently, R.C. Bhargava, Chairman of Maruti Suzuki, gave an interview to a TV channel, where he said that the increase in petrol prices is adversely affecting demand for petrol cars in India. In fact, he pointed out that there is lesser demand for petrol-powered passenger vehicles in the country.
In the interview, he commented “The movement is all towards diesel. The percentage of diesel cars, which are being sold, has been going up steadily.” He also added “I don’t see much happening in the petrol car business till at least the budget, when they may put an extra excise duty on diesel cars.”
In an interview to CNBC-TV18, Bhargava said that the company wishes to finalise the deal with Fiat India for buying diesel engines within this month itself. By procuring new diesel-run engines, the company hopes to increase sales from January 2012.
When questioned about Manesar plant, he said that Maruti Suzuki is ramping up production with a line B. This new unit will help the company produce extra 800-850 units on a daily basis; combined with the line A, which already runs at full capacity, reaching the maximum production capacity of the plant of 1600-1700 vehicles a day.
Talking about indications that the company expects to see hike in sales in A1 segment considering the change in petrol prices, he said that demand for petrol cars is meagre. According to Bhargava, customers are migrating towards diesel cars in droves and the company's future also lies in the same. He said that petrol car business will not see any rise at least till the 2012 budget.
When reminded that labour issues resulted in loss of market share in 2011, he said that the company will produce more diesel cars to salvage their lost customers in 2012. He commented that their efforts towards attaining 42-43 per cent share again will depend largely upon the number of diesel cars Maruti has. This underscores the necessity of its deal with Fiat India, along with the need of some new models in its India line up.
Bhargava accepted that Maruti will record lesser sales this year as compared to the previous one. Though the company is working towards attaining its previous position, it is not likely that its efforts will bear fruit soon.
When the topic of Manesar fiasco was broached, Bhargava asserted that the interaction between workers and top managers has increased considerably. The company does not foresee something like that happening again; he has been to Manesar himself this year. He said that managers have met close to 200 workers individually, with plans to interact with all 1200 employees by the time January 2012 ends. He said that new channels of communication had been put into place so that workers could put forward their grievances to management easily.
