The Telegraph
Since 1st March, 1999
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Maruti zooms in on GM model

New Delhi, Jan. 25: Maruti Udyog Ltd is looking at sourcing a new model from General Motors (GM).

The Indian car maker, owned 54.2 per cent by Japan’s Suzuki Motor Corp, wants to now look at a range of cars for the year 2004-05 from GM, global partners to Suzuki, instead of the usual annual practice of accessing new cars from the Japanese auto firm’s range.

Senior Maruti executives said the option would be considered as the country’s largest car maker does not have any new products to be launched in the coming fiscal.

Earlier, Suzuki has held discussions with its 20 per cent equity stake partner General Motors to introduce in India, the Panther utility vehicle, which will carry the Maruti brand with minor external modifications.

The 1.6-litre Panther utility vehicle is a product of Japan’s Isuzu Motors Ltd, which is 49 per cent owned by US-based General Motors. It was scheduled to be launched around the middle of 2004 at a price of Rs 6 lakh to Rs 7 lakh.

The talks, however, did not materialise. “But both auto makers are open to the idea of introducing a General Motors product badged under Maruti,” he said. Officials said it could be in the same range or in a lower price segment.

Analysts said Maruti can help General Motors improve its Indian market share by leveraging its distribution clout.

Maruti is ranked among the top 20 car sellers in the world and is credited with creating the small-car market in India. Its models account for nearly 59 per cent of the country’s overall passenger car market. General Motors has a meagre share of about 2 per cent of the Indian car market, and 8 per cent of the bigger, mid-sized car segment.

Currently, GM manufactures in India the German-engineered Opel Astra, Corsa, Optra and Swing models at its plant in Halol in Gujarat. The unit does not manufacture engines.

Sources said Maruti, might, however consider importing Suzuki models as completely built-unit, which would provide some fizz to its product portfolio. Last year, it had imported the Grand Vitara XL-7 sports-utility vehicle as a fully-built unit priced at Rs 15 lakh.

“But, nothing has been firmed up yet as the auto maker is currently working on estimated sales and revenue budgets for the financial year ending March 2005,” he said.

Maruti, India’s first stand-alone car company to list with a blockbuster IPO in June, currently makes 10 models at its plant on the outskirts of Delhi. It imports one fully-built unit from Japan.

The auto maker, which has a dominating 50 per cent share in the new car market, has been helped by a cut in production tax in February that allowed all car firms to drop close to 5 per cent on their sticker price.

During April-December 2003, it has reported a 30.3 per cent rise in sales at 3.28 lakh units over the corresponding period.

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