Maruti to invest Rs. 550 crores, aims Rs. 11,500 crore turnover

NEW DELHI, JULY 15. Maruti Udyog, India's largest car maker, will invest Rs. 550 crores in the current fiscal besides targeting an over 24 per cent rise in turnover at Rs. 11,500 crores, company officials said.

"Fresh capital expenditure of Rs. 550 crores will be made this year, mainly to launch a new vehicle 'Every', " the officials told PTI here.

Maruti is expected to launch a local version of Suzuki's 1300cc 'Every' van in the domestic market this year.

The company would however, make the investments from internal accruals and not resort to fresh borrowings, they added.

"About Rs. 350-400 crores is generally spent on launching a new model. The rest of the money would go towards upgrading the existing equipment," Maruti officials said.

"Our turnover should be about Rs. 11,500 crores for this fiscal. We also expect to make a turnaround," they said adding the company had recorded a turnover of Rs. 9,250 crores during 2000- 01.

However, Maruti had incurred a net loss of about Rs. 250 crores over the operating profit during the fiscal ended March 31, 2001 due to falling sales and pressure on margins.

During 1999-2000, the company had recorded a 36.8 per cent fall in net profit at Rs. 330 crores over Rs. 552 crores in the previous fiscal.

However, its turnover went up by 15.4 per cent to Rs. 9,673 crores over Rs. 8,181 crores in 1998-99.

Maruti had invested Rs. 2,000 crores over the last three years to launch new models like the premium small cars 'Alto' and 'Wagon- R' and the mid-size sedan 'Baleno' besides upgrading existing models like 'Zen' and 'Esteem'.

Mr. Jagdish Khattar, managing director, Maruti Udyog, had earlier said an aggressive localisation plan would be pursued for the new cars like 'Alto', 'Wagon-R' and 'Baleno' along with cutting costs to record a profit in this fiscal.

The company officials, however, declined to disclose details on the company's voluntary retirement scheme (VRS) which is likely to be launched in this fiscal.

The VRS is expected to trim the company's over 5,500 strong workforce, one of the largest in the Indian automobile industry, and enhance profitability.

Maruti's car sales during 2000-01 had declined by 13.3 per cent at 3.44 lakh cars against 3.97 lakh cars last fiscal following steep competition from other car makers like Hyundai, Ford and Telco.

Its market share had also declined to about 58 per cent from 62 per cent in 1999-2000.

During 2000-01, total industry car sales had declined by 7.4 per cent at 5.9 lakh against 6.38 lakh units in the previous fiscal.

Maruti's car sales during April-June 2001-02 had, however, increased by 16.5 per cent at 57,404 units over 55,709 units in the same quarter last fiscal.

- PTI

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