Maruti Suzuki looks towards exports to counter slow domestic demand

Maruti Suzuki looks towards exports to counter slow domestic demand New Maruti Suzuki
author image CarTrade Editorial Team
Friday 26 July 2013, 12:41 PM

After failing to cope up with the slowdown in demand by devising new strategies for the Indian car market, Maruti Suzuki is looking towards international markets to revive sales. The decline in demand of cars in India has taken its toll on all auto makers, including Maruti Suzuki, the country's largest passenger car manufacturer. The company is hoping to make a foray into international markets as it does not expect the sales volumes to grow beyond 5 per cent in the current financial year.

Maruti Suzuki looks towards exports to counter slow domestic demand

According to sources, the firm expects to provide discounts on prices of cars to boost the demand in the current quarter. This will be done especially for cars powered by diesel engines as their demand is on a decline due to the constantly rising fuel prices. It must be noted that Maruti Suzuki has a market share of around 40 per cent; however, the firm is facing stiff competition from several international car manufacturers who are launching new vehicles. This competition becomes stiffer by the fact that the Indian auto market has witness a fall in sales for a record eighth consecutive month. Notably, this decline is quite the opposite of the situation about two years back, when the market had recorded growth in double digits.

The company has plans of expanding its reach in international markets by introducing more cars in those countries, wherein it has been already carrying its operations. "Exports are high on our agenda particularly when the domestic markets are not growing," said an official from the company during a conference call with analysts. Despite this, Maruti Suzuki is expecting the export volumes, for the current financial year, to be flat. Out of total sales of 266434 units during the quarter, around 8 per cent were accounted by exports.

Japanese firm Suzuki Motor Corporation has a share of 56.2 per cent in Maruti. According to company reports, Maruti Suzuki reported an increase in the net profit by 49 per cent, which was $107 million for three months to June 2013. This rise in profit can be attributed to reasons like cost-cuts, merger with engine production unit and favourable exchange rates.

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