Maruti expansion plans: The market leader is out to boost output
INDIA’S biggest carmaker Maruti Suzuki aims to boost output by up to 75 per cent as it seeks to maintain its dominant position in the fast-growing domestic market, a report said today. “Depending on how the car market performs, we would like to like to reach 1.5 to 1.75 million units a year by 2015,” the Economic Times quoted Maruti managing director Shinzo Nakanishi as saying. “That should help us keep the 50 per cent share of the market we now have because the total car industry will, by then, be around three million units (per year),” Nakanishi said. He said the board of Japan’s Suzuki Motor Corp, which holds a majority stake in Maruti, would give final approval in January on whether to implement the plan. Nakanishi gave no estimate of the cost of the increase but the newspaper quoted an unnamed Mumbai analyst as saying the company would need to make an investment of up to $1bn (£600m) to increase capacity by 750,000 units.
Maruti Suzuki currently has the capacity to produce one million cars a year. South Korea's Hyundai Motor is Maruti’s nearest rival with a 21 per cent market share. But it also faces competition from a slew of other makers, including Honda Motor and General Motors while India’s Tata Motors recently launched a mini-car priced at around $2,500 (£1,502) that it bills as the world’s cheapest. The company reported earlier in the week that sales in November leapt 67 per cent from the same month a year earlier amid signs the Indian economy was picking up pace after the global slump. The extra capacity would be added in stages. The company owns 242 hectares (600 acres) of land in Manesar in Haryana, of which two-thirds remains unused. “We can make two plants producing an additional 600,000 cars in Manesar,” Nakanishi said. Maruti Suzuki recently reported quarterly net profit in the three months to September soared 93 per cent year-on-year to Rs5.7bn ($123m/£74m).
Analysts say India holds huge promise for global automakers as the country of nearly 1.2 billion people has one of the world's least penetrated car markets.
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