MUL hopes to 'breakeven' by March 2002

By Our Special Correspondent

HYDERABAD, SEPT. 20. Having piled up losses last year, Maruti Udyog (MUL) set itself the objective of achieving `breakeven' for March 2002, but the depreciating rupee has become a cause of concern, as Mr. Jagdish Khattar, its Managing Director conceded.

Speaking to presspersons after inaugurating the new showroom of an MUL dealer here on Thursday, Mr. Khattar said if rupee continues to depreciate import costs would go up putting pressure on car prices ``Then we may have to consider increasing prices'.

This was in response to a specific question whether they would increase prices of Maruti cars. Localisation levels are quite high at over 90 per cent for most of its models like Zen, Omni and the Maruti 800, but for the newer models it is around 80 per cent.

Mr. Khattar said their objective this year was to achieve an aggressive 60 per cent market share for the entire year. `Till September 11, we thought we were on course'', he said leaving a question mark on how the car market would behave for the rest of the year, given the worsening economic scenario.

In the first five months this year, the overall car market in India registered a negative growth of 2 per cent, but MUL managed a 12 per cent growth rate. As compared to 45 per cent market share in June 2000, MUL pushed ahead to achieve 60 per cent this year.

Last year MUL made losses because it had invested over Rs.2,000 crores on bringing out new models and also increasing capacity, which was expected to give returns this year and help increase market share and volumes, he said.

Under pressure, MUL has been looking for other avenues of business and identified four areas- buying and selling preowned cars, leasing and fleet management, Insurance (MUL as agents), and financing. Mr. Khattar said they hope to start leasing and fleet management operations very soon, and were already in talks with major corporates.

Coming to Andhra Pradesh, he said MUL registered an exceptionally high growth of 29 per cent in the State which accounts for 5 per cent of its total all India sales.

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