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Thursday, 4 April, 2002, 13:54 GMT 14:54 UK
Indian carmaker reports turnaround
Maruti Suzuki logo
Maruti holds about 60% of the Indian car market
India's largest carmaker, Maruti Udyog, has made a remarkable turnaround by refocusing its business locally.

"We have a range of models that are suitable to the Indian condition, that is why we have the trust of the Indian customer," managing director Jagdish Khattar told the BBC's World Business Report.

Today there are over a dozen manufactures but we still hold a 60% market share

Jagdish Khattar
The New Delhi-based company, held 50-50 by the Indian government and Japan's Suzuki Motor, Swung from a 2.69bn rupees (38m) loss to a profit of 550m rupees in the fiscal year ending March.

The firm credited the turnaround to greater productivity, a 19% reduction in the workforce, fewer vehicle defects, and refocusing on cheaper Indian parts suppliers.

"In our entire manufacturing we able to increase our productivity extremely," Mr Khattar said.

"We were able localise Indian manufacturers producing components in India, which is far more economical than importing from Japan or elsewhere in the world."

The upswing comes as the government prepares to privatise Maruti, which has a near 60% slice of the domestic car market.

Revenue rebound

Revenues grew 0.82% to 92.9bn rupees and vehicle sales rose 1.5% to about 340,000 units as overall domestic car sales dropped about 0.1% in the last year, hit by a slowing domestic industrial growth and falling exports.

Until 1998, Maruti held more than 80% of the domestic market but lost out to new entrants such as South Korea's Hyundai and domestic firm Tata Engineering and Locomotive in the mid-size car segment.

"Today there are over a dozen manufactures but we still hold a 60% market share," said Mr Khattar said.

Maruti's dominance is due to its small and cheap cars - priced up to 300,000 rupees - which make up the entire entry level segment and account for 37% of new car sales.

The firm also control nearly 50% of the 600,000 plus car segment.

Maruti, managing director, Jagdish Khattar
"Producing components in India is far more economical than importing from Japan or elsewhere."
See also:

22 Mar 02 | Business
Japan to up Indian auto investment
01 Nov 01 | Business
Asia car sales 'stagnant'
25 Sep 01 | Business
India's car giant slashes workforce
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