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Tuesday, 25 September, 2001, 16:08 GMT 17:08 UK
India's car giant slashes workforce
Maruti web page
Maruti has a 58% share of India's car market
Maruti, India's largest car maker, has launched a voluntary redundancy scheme to cut its workforce by 20%.

The company, a joint venture between Japan's Suzuki Motor and the Indian government, has a 58% share of India's car market but has been hit by sliding sales and higher costs.

Maruti made an unaudited net loss of 2.53bn rupees ($52m; 35.9m) in the past year to March, from a profit of 3.3bn rupees in the previous year.

The company aims to break out of the red this year.

Maruti says the scheme, which will run for a month, will be open to all employees who have served the company for at least 15 years.

Well received

Partha Gosh, correspondent at the Business Standard in Delhi told the BBC's World Business Report that workers' reaction has been favourable.

"I get a feeling that most of them are welcoming the deal because it is one of the most attractive in the manufacturing sector in India," he said.

"Compared to the others that were given to employees in companies like Tata Engineering this seems to be a very attractive scheme."

Mr Gosh says that though fierce competition is the source of most of Maruti's ills, the company still holds a strong position, particularly in the small car market.

"Most of the companies which have come here have very few offerings in that segment," he added.

"Maruti has launched several small car models during the past year and is preparing new launches for next year, so in that way the company is very strong on the product side at least."

Partha Gosh, Business Standard in Delhi
"Maruti is facing stiff competition"
See also:

14 Feb 01 | South Asia
Quiet reception for India privatisation
23 Jun 00 | South Asia
India sells state-owned firms
10 Sep 01 | Business
India worries over stagnant growth
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