Plans to invest Rs 6,000 cr to set up new plant, diesel engine unit

Our Bureau

Big plans

To fund

expansion plans through internal accruals

MUL to

introduce five models in five years

Mulls compact

model for export in 2008-09

New Delhi, Sept 5

Maruti Udyog Ltd (MUL) aims to increase its annual car sales to one million units by the year 2010.

The company is planning to invest Rs 6,000 crore to build a new car plant, a diesel engine unit and a transmission facility, said Mr S. Nakanishi, Chairman, on Tuesday.

Addressing shareholders at the AGM, he said that MUL also plans to introduce new models and upgrade its existing plant. The company hopes that its car sales will cross 6,00,000 units in the current fiscal, he added.

"The company is aiming at sales of one million cars per year in 2010. Investment in new facilities and in R&D are both part of the strategy to achieve the ambitious sales goal."

MUL, which is 54.2 per cent owned by Japan's Suzuki Motor Corporation (SMC), plans to introduce five models in the next five years.

The five new models planned will be in addition to upgrades for existing models that the company plans to introduce, he added.

"This will be over and above facelifts of any existing models and launch of new variants."

Mr Nakanishi also said that the company will expand its network of sales outlets and service workshops.

The company, which wants to remain debt-free, plans to fund the expansion plans through internal accruals, said Mr Jagdish Khattar, Managing Director.

MUL will introduce a compact model for export, mainly to Europe, in 2008-09. It aims to export 1,00,000 units annually.

According to Mr Nakanishi, the recent alliance between Suzuki and Nissan for synergies in manufacturing will help MUL.

"The increased scale of operations on account of the Nissan contract is likely to further improve cost and quality competitiveness at the Maruti facilities, which in turn will benefit customers in the domestic market."

He added that Suzuki and Maruti are also increasing collaboration in R&D efforts.

"Suzuki sees a major role for Maruti in the area of R&D for cars in Asia. The talent will be on tapping the vast pool available in India and develop people through extended training at SMC, Japan.

This, combined with augmentation of R&D facilities, will help Maruti acquire a pre-eminent position in Suzuki's global R&D set-up."

(This article was published in the Business Line print edition dated September 6, 2006)
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