Range of customer expectations is expanding, says Maruti Chairman

New Delhi: Car market leader Maruti Udyog Limited held its 26th Annual General Meeting here today.

Maruti Udyog Limited Chairman, Shinzo Nakanishi, informed shareholders that 2006-07 had been the best year ever in the history of Maruti, in terms of sales performance and financial results.

During the fiscal 2006-07, the net sales of the company increased by 21.6 per cent and Profit After Tax grew by 31.4 per cent over the previous year. Net profit to net sales ratio increased from 9.9 per cent in 2005-06 to 10.7 per cent in 2006-07.

Evolution of the Indian Customer

With the rapid growth of the Indian economy and its greater integration with the world, the range of customer expectations is expanding, Mr. Nakanishi said.

While the customers continue to expect their cars to be reliable, fuel efficient, with low cost of ownership, requiring affordable spare parts and service network, at the same time they look for cars that are trendy, stylish and contemporary.

In the new wave, the customers are rapidly scaling up to feature loaded variants. For example, at the entry level, the share of air conditioned variants is growing at the cost of standard variants. Cars with power steering are increasingly preferred to those without. Similar trends are seen in the compact and premium compact segments, where customers are willing to stretch their budgets for better looks and features, he said.

Related trends, like more than one car per family, and shorter ownership cycles, are gaining momentum. The large number of entry-level customers continue to offer tremendous growth opportunity.

Maruti and Suzuki’s strategy has been to widen the offerings for the Indian customers. A large number of model launches in the past year with multiple fuel options are a reflection of this move.

A wide product range with superior features, is helping the company to tap entry-level customers and yet meet the evolving lifestyle needs of the customers who are looking to upgrade. Maruti enjoys a car parc of close to 6 million vehicles.

Evolving Suzuki Image

Mr. Nakanishi noted that Maruti and Suzuki were well prepared for this evolution of the Indian customer. This coincides with a major transformation at Suzuki. The process started a few years ago, when Suzuki consciously decided to expand its brand image from being the leader in mini-cars and compact SUVs, to becoming a “complete car maker”.

Mr. Nakanishi said, “In line with this, Suzuki decided to design its new products with a distinctly stylish and European flavour. The Swift reflected the new design philosophy, focusing on bold and aggressive designs and European styling.”

“Since then, Suzuki has designed and launched three new globally strategic models, including the SX4 and Grand Vitara that reflect the new approach,” Mr. Nakanishi added.

Investment

The company has investment plans of Rs 9000 Crore (Rs 90 Billion) upto 2010 in new facilities including the new car plant and diesel facility at Manesar, new series engines for its cars and upgradation of the Gurgaon plant. These will help Maruti further fortify its position in the market.

Bringing Maruti on the Global Map

Maruti’s relentless focus on quality, productivity and manufacturing excellence has helped it secure a larger role in Suzuki’s global plans. Last year, Maruti commenced exports of Zen Estilo to Indonesia and has increased its presence in the non-European markets over the last two years. Maruti’s exports to Non-European countries have shown an increase of 65 per cent over the last year.

Even though Suzuki has a manufacturing plant in Europe, the next high volume car targeted at the European market will be an export from Maruti, India.

Progressive Maruti R&D

While India, as Suzuki’s largest overseas operation will continue to have a prominent place in SMC’s global plans, Suzuki is specially developing the R & D capability within Maruti.

Maruti engineers have made impressive contribution in the Swift, new WagonR, Zen Estilo, new Omni and facelifts of Esteem and Alto. Maruti engineers are regularly trained at SMC, Japan and a higher number of design and engineering projects are expected to be taken up primarily by Maruti.

Giving back to Society

Maruti’s initiatives in enhancing road safety have received big encouragement from the state governments. In November last year, a second IDTR (Institute of Driving Training and Research) institute was started in South Delhi. In addition, MoUs for two more IDTRs in Haryana have been signed with the state government. Other states, including, Punjab, Gujarat, Bihar, West Bengal and Uttaranchal have showed keen interest in starting such facilities.

Change of Name

Among other resolutions, the shareholders approved the change of the company’s name to Maruti Suzuki India Limited. The new name will come into effect after it is approved by the Registrar of Companies.

---------------------------------------------------
Issued by Corporate Communications,
Maruti Udyog Limited,
011-2373 8141

Back