Friday, 5 August 2011

Maruti Suzuki to cut diesel engine exports to Hungary, focus on India

Looking to hit back at competitors with the new version of its premium hatchback Swift, Maruti Suzuki India on Thursday said it will drastically cut exports of diesel engines to Hungary to concentrate on the Indian market.  The company, which has seen increased competition from new entrants likes Ford Figo, Toyota Liva and Volkswagen Polo, said it will increase production of the Swift to up to 18,000 units a month to reduce waiting period. Honda's upcoming Brio is also expected to add to the competition. 

"We are reducing on export of diesel engines significantly to cater to the domestic demand. Currently we export about 35,000 to 45,000 units every year to Hungary. We will reduce it to almost negligible levels in the next six months," Maruti Suzuki India (MSI), Managing Executive officer (Marketing and Sales) Mayank Pareek told media. 

The company's diesel engine plant at Manesar currently produces 2.8 lakh engines per annum but it needs about four lakh units for the Indian market, he said. "The additional engine that we get (after cutting exports) will go for the Swift in India," Pareek said.  With petrol prices going up, demand for diesel engine cars have soared. Most of the companies, which offer petrol and diesel variants of a car model are now witnessing demand ratio of 70:30 in favour of diesel cars. 

MSI has invested over Rs 550 crore on the development of the new Swift. It will be manufactured on an all-new platform. "Production of Swift will be increased to about 17,000-18,000 units per month from an earlier 10,000-11,000 units earlier. Thus the waiting period will come down to 2-3 months from 3-4 months earlier," he said.  On the expected sales, Pareek said, it will be around 18,000 per month "but we will try to push for 20,000 per month". Current sales of the Swift are around 12,000 units a month. 

So far, the company has received bookings for over 30,000 units, he said, adding since its launch in 2005, Swift has clocked over 6 lakh units. The new Swift will be powered by 1.2 litre petrol engine and 1.3 litre diesel engine. 

Pareek did not disclose the price saying it will be announced at the formal launch on August 17, but sources said it will be about Rs 30,000 more than the existing ones, which starts at Rs 4.09 lakh and goes up to Rs 5.38 lakh (ex-showroom Delhi). 

The car will be produced at MSI's Manesar plant, where unit B will start operations in September with the production of the of the new Swift.


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