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MUL board takes stock

Our Bureau

NEW DELHI, Aug. 29

The board of directors of Maruti Udyog Ltd (MUL) met here on Monday to discuss the company's performance after the price cuts in Maruti 800, the Omni and the Wagon-R in June this year. According to sources, the board also considered the launch schedule for the Suzuki Alto and the possible price and sales target for the car.

While the board formally took note of the company's performance during the four months ended July 2000, the discussions were said to have centred around price cuts and rise in sales.

Company officials were not forthcoming with the details of Monday's deliberations and maintained that it was a routine board meeting. However, sources said that the board discussed whether the price cuts, which were originally announced as being valid fo r a three-month period, needed to be extended.

Accordingly, the revised lower prices will be valid till September 30 this year and a decision regarding an extension or otherwise of the prices has to be taken soon. The reduction in prices has led to an improvement in sales and has been reflected in it s performance during July and August this year.

The board also took note of the financial impact of the price cuts and the possible effect on the turnover and profits of the company during the current financial year.

Further, the continuing depreciation of the rupee and the fallout on the company's margins were said to have been discussed by the board.

Earlier, the company's Director, Finance, Mr. A.R. Halasyam, had said that the depreciation of the rupee would have a considerable impact on MUL's bottomline. The company continues to have imported components for all its passenger car models, though it i s a low five to ten per cent in all its small cars. However, the large volumes in this segment will lead to a higher cost of the imported components in case of further erosion in rupee value.