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Maruti to invest in diesel engine plant

By Our Special Correspondent

NEW DELHI, MAY 18. The country's largest automobile producer Maruti Udyog Limited (MUL), which today announced a three-fold rise in net profit, also outlined plans for fresh investments. The company said it would be investing Rs. 350 crores for setting up a diesel engine plant with technology from Fiat of Italy and General Motors' subsidiary, Adam Opel.

Disclosing this here today, the MUL Managing Director, Jagdish Khattar, said an agreement had been concluded recently with Fiat and Opel for manufacture of a 1.3 litre state-of-the-art diesel engine based on the common rail injection system. This measure was being taken to meet the growing demand for diesel cars in the Indian market, he said. Making a statement after a meeting of the MUL board of directors, he said, "Our decision to invest in a new facility to manufacture diesel engines underlines oor parent Suzuki Motor Corporation's continued commitment to India. It is in keeping with Maruti's strategy of providing suitable products for diverse segments of customers.''

He said the new facility would have capacity to manufacture one lakh diesel engines annually and would begin production in 2006. At present, Peugeot of France, supplies diesel engines for Maruti's Zen and mid-sized Esteem models. This will further reduce the imported component in Maruti vehicles, making them more competitive in the Indian market.

The company also reported buoyant results with profit rising by nearly three times to reach Rs. 542.18 crores during 2003-04. Total income also rose by 31 per cent and is estimated at Rs. 9,751 crores during the year. According to a company statement, for fourth quarter of 2003-4, the net profit surged by 193 per cent to touch Rs. 157.10 crores while total income rose by 33 per cent to Rs. 2,987 crores during January-March 2004.

The MUL board has recommended a dividend of 30 per cent for its shareholders. Maruti, which has 54.2 per cent shareholding by Suzuki of Japan, recorded highest ever sales since its inception 20 years ago. Sales are pegged at 4.72 lakhs during the year, rising by 30.3 per cent over the previous fiscal.

The company also exported 51,175 units, the highest ever since the company began exporting cars in 1986. Sales of the popular base model Maruti 800 spurted 17 per cent but the fastest rise was of the compact car Alto which recorded a rise of 130 per cent.

Last year, Maruti also forayed into growing sports utility vehicle segment by launching `Grand Vitara.'

During 2003-04, Maruti also made efforts to become Suzuki's R&D hub for Asia outside Japan. The company introduced upgraded versions of the WagonR and Zen with the latter designed in-house completely. Maruti's non-manufacturing businesses like Maruti Insurance, Maruti Finance, Maruti True Value and Maruti N2N became fully operational during last fiscal, the company says.

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