NEW DELHI: Maruti Suzuki, India's top car maker, expects to post single digit sales growth this fiscal year, its chairman said on Friday, adding he expects the Indian car market to revive after two to three months.
"If you ask me, we will not reach a double-digit," Chairman R.C. Bhargava told reporters, referring to both Maruti and the India car sector.
Car sales in India fell 16 percent in July, their first drop in two-and-half years, as rising interest rates and fuel prices force customers to tighten their purse strings in the world's second-fastest growing major auto market after China.
Maruti, which sells nearly half of all passenger cars in India, posted a record 25 percent slump in July sales. Maruti is 54.2 percent owned by Japan's Suzuki Motor.
The country's largest car maker today said it has cut down production on most of its models this month due to slowdown in the market.
The company said by October it will finalise the location for setting up its new production facility, which could entail an investment of about Rs 6,000 crore.
"We have reduced the production of all the models except Swift and DZire. The market is not doing good now," Maruti Suzuki India (MSI) Managing Director and CEO Shinzo Nakanishi told reporters here.
He, however, declined to specify by how many units the company has cut down its production.
When asked about the sales target, MSI Chairman R C Bhargava said, "The current slowdown is short term and the market will revive during the festive season. However, we will not achieve a double digit growth during the fiscal".
On MSI's plan to enhance capacity, Bhargava said the company is scouting many locations in different states, including Gujarat for setting up a facility.
"We have been looking at various sites for almost one year. Gujarat has an advantage as our Mundra port for export is located there," Bhargava said.
He said the company is likely to finalise the location by October this year.
Talking about the capacity of the planned facility, Bhargava said:"The ultimate optimum size will be to have installed capacity of 7.5 lakh to 10 lakh units per year...It should require an investment of Rs 6,000 crore".
The facility is likely to be operational by 2017, he added.
Maruti suzuki expects single digit sales growth in fy12; cut
CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
12 August 2011
CAclubindia
