UPDATE 1-India’s Maruti says sales shouldn’t fall in 2008/09
Maruti Suzuki India (MRTI.BO: Quote, Profile, Research, Stock Buzz), the country’s top car maker, is worried about adverse economic conditions but expects new models to help it beat last year’s production and sales volumes.
Maruti, 54.2 percent-owned by Suzuki (7269.T: Quote, Profile, Research, Stock Buzz), has more than half of the Indian car market. It sold 711,824 cars in the local market in the fiscal year ending March and exported 51,669 cars, industry data showed.
“There is a great deal of unpredictability about how world economic scenario will play out. Most experts say we have not yet got to the bottom of the economic cycle,” Chairman R.C. Bhargava said at the launch of Maruti’s A-star hatchback on Wednesday.
High borrowing costs and a slowing economy have hit car sales in India. Sales have fallen from a year earlier in three of the past four months, and an industry body has said the challenge was to sustain single-digit growth in the fiscal year to March 2009.
Bhargava said Maruti’s sales in the first seven months of 2008/09 were 4 percent higher than a year earlier, but commodity prices had hit profitability.
“The next five months, again very difficult to predict, we do not expect sales and production this year to go below last year’s figure,” he said, adding benefits from the recent falls in commodity prices were expected to be seen from February.
The A-star, the company’s eighth new model in the last three years, will have a base price of 346,775 rupees ($6,950).
“All the cars which we have launched recently have been very successful. The Swift and Dzire still have waiting lists despite the slowdown, despite the interest rates,” Bhargava said.
Maruti will export the A-star to Europe from January, and expects its total vehicle exports to reach 200,000 by 2010/11, Bhargava said.
Bhargava said Maruti expected it would get an order early next year from Japan’s Nissan Motor Co (7201.T: Quote, Profile, Research, Stock Buzz) under a contract manufacturing deal struck in 2006.
Maruti had earlier said it would make 50,000 cars for Nissan, but on Wednesday Bhargava said that was yet to be finalised.
Shares in Maruti rose 0.7 to 516.50 rupees in a Mumbai market .BSESN that closed down 1.8 percent. ($1=49.9 rupees) (Reporting by Devidutta Tripathy, Editing by John Mair)
Source: blogger.com