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PTI
New Delhi, Sept 3: Auto giant Maruti Udyog has formulated a four-pronged strategy to retain its leadership position in each segment of the passenger-car market and enter the new millenium with confidence.
"We are looking with confidence at the new millenium which will give us immense strength. We have developed a medium-term policy to exploit the huge potential emerging in 2000," managing director Jagdish Khattar said in an interview.
The action-plan of Maruti, which has about 70 per cent market share in the passenger car segment, includes ensuring implementation of the launch programme of its new models as per schedule and expanding its marketing network, Khattar said.
It was also aiming at further strengthening the company's vendor base besides gearing up the organisation to meet emerging challenges, he said.
The Rs 8,000-crore company, which has not introduced any new car since 1994, has lined up three new models for launch beginning November to maintain its supremacy in the carsegment.
Anticipating a demand boom from next year as there could be a tendency among auto-buyers to own a millenium vehicle, Maruti is gearing itself to maintain its leadership position in the highly competitive market.
"Maruti udyog will continue to be number one car producer in the country and our market share will be more than the combined share of number two and three players," Khattar said.
When reminded that Hyundai sold about 7,000 units of Santro against 7,900 units of Zen during august, Khattar said "in this segment we will maintain our leadership position."
To augment Maruti's market share, the company has formulated a strategy, which is being executed to ensure that new models were rolled out as per schedule.
He, however, declined to give details on the time and pricing of the new models but did not rule out introduction of a new model in the remaining four months of the twentieth century.
On the threat perceptions from the host of new cars including Santro, Matiz (Daewoo Motors) andIndica (Tatas) "why should we feel threatened. We are coming out with our own models."
He parried the question on which car and company could be the most serious threat or challenge, saying that "we take every one of our competitor seriously."
Khattar said that his strategy would be on volume business and that he was prepared to sacrifice profits for the purpose. "We are looking at volumes and there has to be a trade-off between volumes and profits," he emphasised.
Khattar, who took over as the chief executive of the Rs 8,500-crore car giant last month from RSSSLN Bhaskarudu, said that Maruti had started working on new models in August last year.
Asked on indigenisation of content in the wake of earlier criticism that transfer of technology from MUL's Japanese partner Suzuki Motor Corporation was delayed, Khattar said "our effort will be on maximisation of localisation as early as possible".
"It is in our own interest to cut down costs. But it should also be remembered that 100 per cent localisationis also not practical due to economy of scales."
Khattar admitted that Maruti had not introduced a new model since 1994 when it launched its medium-size car Esteem.
Maruti, which is targeting to become a Rs 10,000-crore car company in the first year of 21st century, would also strengthen its vendors' network for which it was prepared to participate financially.
"To keep with the new models and future requirements we will need a much stronger vendor base. We will help our vendors to acquire expertise and are even willing for financial participation," he said.
Khattar, however, said that company had no such proposal under consideration as of now and added "if required we will do it."
"Our focus would be to help maruti vendors in getting new technologies, collaborations, engineering support for further localisation of auto-parts," he said.
The company has also planned to expand its dealer neetwork during the current fiscal. It has targeted to have a total of 200 dealers by the end of the fiscalagainst 150 dealers at present.
"Expansion of dealer networking is a continuous process and we would keep doing that according to our needs," khattar said adding that Maruti would also have about 1,100 authorised service Maruti service centres by 1999-2000.
Khattar said the company's strategy included gearing up the organisation for meeting the new challenges emerging due to hotting up of competition in the market.
Meanwhile, Maruti created a record in august by selling 35,907 passenger cars, the highest ever sales registered by the company since its inception 15 years ago. The previous best was recorded in july when mul sold 35,407 cars.
The company's sales also zoomed up 20 per cent to 1,57,419 units in the first five months of the current fiscal against 1,32,046 units sold in April-August of 1998-99.
During April-August of the current fiscal, Maruti-800 sales were 16 per cent higher at 82,568 units including 18,735 cars sold in August against 71,312 units sold in the same period lastfiscal.
Similer trend was recorded by the Zen model as the company sold a record number of 7971 units during august this year against the previous best of 7881 units in June 1999.
Zen sales went up 19 per cent to 33,388 units in the first five months of the current fiscal compared with 28,087 units sold in the same period of 1998-99.
Maruti posted a 20 per cent decline in net profit during 1998-99 to Rs 522 crore from Rs 652 crore in the previous fiscal. Total income of the company also declined by about 4 per cent to Rs 8,118 crore during the period from Rs 8,474 crore in 1997-98.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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