The Hindu : Maruti to exchange other brands too

Online edition of India's National Newspaper
Sunday, Sep 21, 2003

Business

Business

Maruti to exchange other brands too

By Our Staff Reporter

BANGALORE SEPT. 20. Maruti Udyog Ltd., the country's leading car maker, has extended `True Value', its car exchange scheme, to people who own cars made by competition also. Launched in October 2001, True Value had offered Maruti customers a chance to sell their cars, or exchange them for new ones.

Now, people with cars from competition can also sell their cars, or exchange them for new Maruti Suzuki cars, said Jagdish Khattar, Managing Director, Maruti Udyog Ltd., a subsidiary of the Japanese auto major, Suzuki Motor Corp. MUL also launched a new website http://TrueValue.MarutiUdyog.com, here on Saturday.

Since October 2001, the company had bought 6,000 cars across the country and sold 5,000, under True Value, Mr. Khattar said. Of the 6,000, about 60 per cent (3,600) were exchanged. The remaining was outright purchases.

About 70 per cent (4,200) cars were either Maruti 800s or Omnis, said G.C. Dwivedi, General Manager, New Business, MUL. Some of them upgraded to B segment cars, while about 12 per cent went directly from A segment (Maruti 800) to C segment (Maruti Esteem), he said. In the last two months under True Value, the company was buying and selling about 1100 cars a month, Mr. Khattar said.

Indian car owners typically did not change cars for as long as seven years, Mr. Khattar said. In the U.S., three years were the norm. Car replacement accounted for about 33 per cent of sales in India, said Kinji Saito, Director, Marketing and Sales. The balance was split evenly between those buying a second car, and first time buyers, he said.

In Japan, 70 per cent of sales was from "replacement customers'' 20 per cent from those buying a second car and only 10 per cent from "newcomers,'' Mr. Saito said. In the U.S. 90 per cent of the customers were those who were looking to replace an existing car.

Mr. Dwivedi said a customer with an existing loan on a car "will have to pay it off, and take a fresh loan'' to pay the difference in value between the old and the new car, in the case of a trade-in. "A carry over scheme'' was not being offered, he said.

The company offered to evaluate all cars free of charge and then the customer could choose to sell, exchange or even walk away, Mr. Khattar said.

A week after admitting that sales in September were hit due to a strike in a parts supplier's factory, Mr. Khattar said the company was trying to boost procurement from alternative suppliers. A strike in a foundry unit of DCM Industries, which supplies 70 per cent of cylinder blocks to MUL, has raised fears of cuts in exports, and domestic sales for the second month in a row.

On Saturday, Mr. Khattar told reporters here that the company had brought in `four Japanese experts' to help `other suppliers improve their foundries' to meet increasing demand during the festive season, starting first week of October. He said `other suppliers' were now servicing 85 per cent of demand. Mr. Khattar admitted that the problem was not resolved yet, as the strike continued.

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