The Hindu Business Line : Maruti won’t drive Rs 1-lakh car

New Delhi, July5 Tata Motors’ 1-lakh car project may have excited Mr Carlos Ghosn, CEO of Nissan-Renault, to consider entering the compact car segment, but it has certainly not enthused Mr Jagdish Khattar, CEO and MD of the leading domestic auto major, Maruti Udyog Ltd.

“Our Japanese partners tell us that we cannot make a car in this range,” he said at the launch of the new Grand Vitara on Thursday. Besides, it did not see competition from Tata Motor’s Rs 1-lakh car impacting MUL’s market share in the entry level segment.

“Maruti should not be affected since the segment it will cater to will have a different customer base. The 1-lakh car would have a different size, engine capacity and features,” said Mr Khattar

Volume vs. Margin

Commenting on the impact of interest rates on its car sales, he said that this was currently happening and the company was not likely to match the same pace of growth as compared to last year. However, it would continue to focus on volumes instead of higher margins. Mr Khattar said: “We will focus on selling more cars. We can’t sell less. If we don’t utilise full capacities at our factory, our costs would go up and this would impact our suppliers also.” In the latest quarter ended June, the passenger car segment grew at 13.5 per cent against which Maruti grew at about 17 per cent.

Maruti launched its sports utility vehicle Grand Vitara in the manual and automatic transmission variant priced at Rs 13.80 lakh and Rs 14.8 lakh respectively (ex-showroom, Delhi). This would be the company’s fifth launch in the last one year, which includes new models like Zen Estilo, SX4 and variants such as WagonR Duo and Swift Diesel.

Maruti said that it was not betting on volumes for its new SUV but was aiming to widen its product offering. The Grand Vitara would be imported as a completely built unit from Suzuki Motors Corporation’s factory in Japan. Maruti’s launch of Grand Vitara would compete with Ford’s Endeavour priced in the same range and Honda’s CRV that is sold at a slightly higher price at Rs 17.8 lakh.

More Stories on : Cars | Announcements | New Products & Services | Maruti Udyog Ltd

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