Maruti Suzuki may produce car for Volkswagan
Maruti Suzuki may produce car for Volkswagan
Maruti Suzuki India Ltd (MSIL) said on Wednesday that it may look to manufacture cars for Volkswagen’s global market on a contract basis, similar to its current agreement with Nissan.
The domestic passenger car market leader also said that European exports for the year are expected to be down 20-30 per cent and it is identifying other export markets to fill the gap. Last year, it exported 1.2 lakh units to Europe.
Speaking at the sidelines of the launch of the Alto K10 – a longer and more powerful version of the current Alto 800cc, Mr Shinzo Nakanishi, Managing Director and CEO, MSIL, said, “The talks with Volkswagen are going on at a global level and there is still no clear picture. There is a possibility of an OEM (original equipment manufacturing) supply contract with them, like we have with Nissan.”
Company officials have earlier said that Volkswagen has sent teams to MSIL’s facilities to review the cost-competitive manufacturing facilities of the company in the Gurgaon region. In December last year, German automaker Volkswagen had bought a 19.2 per cent stake in MSIL’s parent company Suzuki Motor Corporation, Japan, for $2.5 billion – fuelling rumours of platform sharing and partnerships across markets. While Suzuki is understood to be an expert in small cars, Volkswagen has more experience in larger cars and diesel engines.
Currently, MSIL has a three-year contract with Nissan to manufacture and export the Pixo (derived from the A-Star) to European markets. The contract for a minimum of 35,000 units a year is said to expire in 2011.
Asked about a capacity constraint faced by the company at its plants, Mr Nakanishi said that MSIL is trying to advance the expansion of the Manesar plant from 2012 and is also asking its vendors to invest in creating more capacity. “This year we hope to produce at least 20 per cent more than the installed capacity. We are already producing over 100 per cent,” he said.
“MSIL has an order backlog on seven to eight models, which adds up to around 15-20 per cent of its total sales,” an official said. Maruti has an installed capacity of 10 lakh units a year, but produces around 27,000 more through efficiency in manufacturing. The expansion at Manesar, part of the Rs 1,700-crore investment plan which includes the engine plant, will add capacity of 2.5 lakh units a year.
MSIL’s new launch in the lower end of the A2 segment, the Alto K10, is priced at Rs 3.03 lakh (Lxi) and Rs 3.16 lakh (Vxi). Building on the success of its largest selling Alto brand, the new car has a longer wheelbase, exterior and interior design changes, a new transmission and braking system. It is powered by the A-star’s 1-litre K Series engine, which delivers a fuel efficiency of 20.2 kmpl, the company said.
Company officials said that Maruti has spent around Rs 70 crore on the development of the new car, besides Rs 30 crore spent by its vendors. With many features packaged at a competitive price, it expects the new car to add incremental volumes of 25-30 per cent to the Alto brand. The company sold 2.4 lakh Altos in 2009-10.
Mr Nakanishi said the Alto K10 will be exported to Indonesia and other neighbouring countries only, as only a right-hand drive version has been developed.
source: thehindubusinessline
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