Financial Daily from THE HINDU group of publications
Tuesday, Aug 23, 2005
Financial Daily from THE HINDU group of publications Tuesday, Aug 23, 2005 |
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Corporate
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Outlook Maruti plans `Next Leap' to improve productivity Our Bureau
New Delhi , Aug. 22 MARUTI Udyog Ltd plans to introduce a new cost-cutting programme to improve productivity. "After a 46 per cent improvement in productivity in the last three years, we are now preparing for further efficiency in in-house manufacturing operations through a programme called the `The Next Leap'," Mr Jagdish Khattar, Managing Director, Maruti Udyog Ltd, stated in the company's annual report for 2004-05. The `Next Leap' programme would be implemented in the current fiscal. Maruti had implemented a three-year Challenge 50 programme in 2002-03, which had resulted in a 46 per cent improvement in productivity at its facility. In fact, productivity measured in hours per vehicle (that is, man-hours spent to produce one vehicle) showed an improvement of 9.2 per cent during 2004-05. "With growth in input prices, our improved productivity and established cost reduction processes in partnership with our vendors helped improve margins," Mr Khattar said commenting on the company's performance in the last fiscal year. Meanwhile, while expressing optimism about growth in the car market in the medium and long-term, Mr Khattar sounded a note of caution over growth in the short-term. "While believing in the medium to long-term growth story, however, we should not assume that the short-term would necessarily be rosy. That would be misleading," he said. "The short-term, say a period of 6-12 months, has its own set of drivers,'' he added. Listing macro-economic factors such as oil prices, exchange rate changes, fiscal policies, commodity price trends and shifts in consumer purchasing power, Mr Khattar said these factors were "clearly beyond the power of a car company and have a strong bearing on the demand in the short-term." He also pointed out that the first quarter of this fiscal has seen a slowdown in growth for the (automobile) industry. "Factors like implementation of VAT and introduction of Bharat Stage III variants to meet superior emission norms may have contributed to this slowdown. It remains to be seen whether this is a blip in the overall growth trend,'' he said.
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