By Priya Nigam
I guess we all have certain childhood memories that stick with us through the years. Mine is of my 6-feet-4-inches uncle trying (with great difficulty and a lot of help from relatives!) to get out of a Maruti 800. We were still in the era when “having choice” meant we could choose between an Ambassador and a Fiat. This was the first time we laid eyes on a Maruti 800 and my (adventurous) uncle had somehow managed to squeeze himself in. However, getting out was another story and we feared he would have to live in it forever!
Japan's Suzuki Motor Corp took the Indian market by storm and the cars quickly became extremely popular. But soon, stiff competition came knocking on the door. Sales of Maruti Suzuki India Ltd, which is mainly owned by its Japanese parent, fell to 64,421 units in March 2008, from 64,556 units in the same month last year. Total sales for the month dipped 2.1% year-on-year to 70,296 vehicles, with exports plummeting 19% to 5,875 vehicles. This decline came despite price cuts on small cars, following the latest Budget’s 4% excise duty reduction.
While Maruti Suzuki suffered a decline, India's second-largest car manufacturer, Hyundai Motor India Ltd (HMIL), recorded a 52% jump in sales to 29,401 units in March, and its total sales surged 66.4% to 47,001 vehicles. India's largest vehicle maker Tata Motors Ltd also disappointed, with a 4% decline in sales to 24,737 units, resulting from Indica sales slumping 14.7%.
Although the March figures were dismal, Maruti Suzuki has been doing well. For the year 2007-2008, the company reported record high annual sales of 7,64,842 vehicles, representing a more than 13% rise from the 6,74,924 units sold in the previous fiscal. Domestic sales of the country's largest carmaker climbed 12% in the year to 7,11,818 vehicles, while exports jumped 40% to 53,024 units. While sales of the Maruti 800 slid, growth was led by the A2 (Alto, Zen Estillo, Wagon-R, Swift) and A3 (SX4, Swift Dzire) segments. The company launched Swift Dzire in the A3 segment earlier last month, and its upcoming models include Suzuki Splash and Suzuki A-Star.
Now Maruti Suzuki has plans to invest Rs2,500 crore to triple the annual capacity at its plant in Manesar by the end of October. The company had earlier decided to hike its overall capacity in India to 10,00,000 units by 2010. Plans have been expedited and it now hopes to be able to take its overall installed capacity in India to more than 9,00,000 units by the end of October. Despite the performance and plans, Maruti Suzuki shares have been on a downturn since October last year, when they crossed the Rs1,200 mark.
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