Maruti jacks up car export target

Maruti jacks up car export target

Agence France-Presse, New Delhi

India's largest carmaker, Maruti Udyog Ltd., Sunday said it hopes to sell 20,000 units of its latest model abroad this fiscal year, raising the annual export target by 50 percent.

Maruti managing director Jagdish Khattar said the company, in which previously the Indian government and Japan's Suzuki Motor Corp. held equal equity, has since the beginning of March begun shipping 16,000 Alto cars worth US$80 million to European markets.

"We are targeting an increase of more than 50 percent in exports this fiscal year due to the success of Alto abroad," Khattar told the Press Trust of India in an interview.

Altos tagged for overseas markets will have extra features such as anti-lock brakes and airbags in line with European regulations, he said.

Maruti's Alto exports rose 41.7 percent in the first quarter of the current financial year, up to 3,377 units from 2,382 a year previously, Khattar said.

"Maruti has confirmed orders for Alto from new markets in Germany, the Netherlands and Italy," he said, adding: "We are (now) targeting to sell 20,000 Alto cars in the foreign markets this year."

Alto is a compromise between the company's best-selling 800cc Maruti runaround and the medium-range Zen, which is priced above 300,000 rupees ($6,250) a unit.

Khattar admitted the flagging sales of Zen in the face of oncoming competition in that range, which has triggered a glut in the Indian automobile market.

Maruti last month announced a net profit of 1.1 billion rupees ($21 million) in the year to March, double its unaudited results posted earlier.

In the previous year, Maruti posted a loss of $2.6 billion on sales of 92.53 billion rupees.

On May 15, the Indian government said it would dilute its stake in Maruti Udyog to 45.8 percent from 50 percent to kickstart its privatization program.

Suzuki bought new shares in Maruti to boost its stake in the joint venture from 50 percent and agreed to pay the Indian government 10 billion rupees as a premium for control of the company.

The government will initially lower its equity to 25 percent by March next year and the rest will be divested in 2004.

Maruti commands the lion's share of the Indian market despite the entry of several global auto giants such as Hyundai, Ford, Daewoo, Fiat and General Motors.

But its market share has fallen to 60 percent from more than 90 percent in the early 1990s, when India opened its car sector after market reforms. The auto sector was previously dominated by antiquated versions of British car models and Italy's Fiat.