Wednesday, 27 July 2011

Maruti Suzuki India to invest Rs 3,000 cr in 2012-13 on capacity expansion, new model launches

The country's largest car maker Maruti Suzuki India on Tuesday said it will invest about Rs 3,000 crore in 2012-13 financial year on various areas, including expanding capacity and new model launches. The company is at present investing about Rs 4,000 crore in this fiscal primarily on setting new assembly lines inside its Manesar facility, marketing, R&D and new model launches. 

"For next fiscal, our capex plan is about Rs 3,000 crore. We will invest on expanding capacities, new model launches, marketing activities and R&D," Maruti Suzuki India (MSI) Chief Financial Officer Ajay Seth told analyst in a conference call. 

For this financial year, the company will put in about Rs 4,000 crore in various activities, he said, adding, one third of the amount could be carried over to the next fiscal. 

The company is setting up two new plants inside Manesar with 2.5 lakh annual capacity each at a total investment of Rs 3,625 crore. The first of these two plants is likely to be operationalised during September-October this year, while the other one is scheduled to be operational in 2012-13.  MSI had rolled out nearly 9.5 lakh units from its Gurgaon facility and 3.5 lakh units from the existing Manesar plant in the 2010-11 financial year.  Besides, the company is also investing Rs 2,500 crore for its K-series engine plant and setting up a dedicated R&D facility at Rohtak in Haryana. 

The company spent 0.7 per cent of its net sales in R&D activities during April-June period this year as against 1.1 per cent in 2010-11, Seth said.  On account of spurt in demand of diesel cars, the company is increasing the production capacity of diesel cars to 2.9 lakh units annually from existing 2.4 lakh units. It sells diesel options of hatchbacks Swift and Ritz and sedans DZiRE and SX4. 

"Diesel cars sales have increased to 60-80 per cent after de-regulation of petrol," Seth said, adding, they contributed 21 per cent to the total sales in first quarter compared to 19 per cent in the year-ago period.  The company will also ramp up the diesel engine capacity to 3 lakh units from 2.4 lakh units by the end of this fiscal. Diesel engines are produced by a separate entity --Suzuki Powertrain India Ltd -- at the Manesar facility. Seth said the company's current import content stands at about 15 per cent, which MSI is planning to bring down by 2-3 per cent every year till next fiscal. 

MSI today reported 18.02 per cent increase in net profit for the first quarter ended June 30 to Rs 549.23 crore from Rs 465.36 crore in the same quarter last fiscal. 

Total income from operations during the quarter stood at Rs 8,529.30 crore as against Rs 8,309.18 crore in the same period last fiscal, an increase of 2.65 per cent.


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