The Hindu Business Line : Maruti to invest $1.8 b in Haryana R&D facility

New Delhi, Oct. 29 Maruti Suzuki India Ltd has announced an investment of $1.8 billion in a research and development facility in Haryana and major structural changes in the company.

The company also announced the appointment of Mr S. Nakanishi as Managing Director, as Mr Jagdish Khattar is completing his tenure on December 18.

Mr Nakanishi, currently Chairman of Maruti Suzuki and Senior Managing Executive Officer of Suzuki Motor Corporation, will head the Indian operations from December as Mr Khattar is due to retire at the age of 65 or by the end of 2007.

The company also announced the appointment of Mr R.C. Bhargava as Chairman from his current position as Director.

The Suzuki Motor Corporation Chairman, Mr Osama Suzuki, said that the company would retain Indians at key positions in administration, marketing, production and engineering.

“At Manesar, the company’s new production facility will reach one million after expanding to its full capacity. So this would require increased costs in marketing and sales network. The additional land at the facility will be utilised to expand capacity and set up our R&D base,” said Mr Suzuki.

He said that the company has asked the Haryana Government for 500 acres of land for its R&D facility, which would make India its largest base for product engineering and development outside Japan.

Commenting on an earlier report which had stated that Maruti Suzuki’s sales had surpassed Suzuki Motor’s sales in their respective domestic markets, Mr Suzuki said that the company’s production in Japan stood at 1.2 million units, which was higher than Maruti’s production in India at one million.

Q2 net up 27%

Maruti Suzuki India Ltd posted a 27-per-cent increase in its net profit in the second quarter ended September 2007 on the back of buoyant sales of its newly launched products like SX4 and cars such as Alto, WagonR in the A2 segment.

Maruti Suzuki on Monday reported sales of 1,76,154 units during the quarter as against 1,49,518 units in the same period the previous fiscal, recording an increase of 17.81 per cent.

The company’s exports also saw a jump of 85.80 per cent at 15,171 units from 8,165 units in the corresponding quarter last year. “A change in product mix with large sales of SX4 and Swift contributed to the increase in income,” said Mr Jagdish Khattar, Managing Director and CEO, Maruti Suzuki India Ltd. He said that the company’s other significant income had accrued mainly from selling of scrap with the company able to sell more of it with increased production of cars.

“Average realisation from sale of cars has increased to Rs 1,91,325 in this quarter, compared to Rs 1,57,683 in the corresponding quarter last year,” said Mr Ajay Seth, Vice-President, Finance. He said that the realisation had gone up with healthy sales in the A2 segment of diesel and A3 segment.

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