The Hindu : MUL takes fresh look at costing

Online edition of India's National Newspaper
Sunday, Dec 22, 2002

Business

Business

MUL takes fresh look at costing

By K. Satyamurty

BANGALORE DEC. 21. The road ahead may be bumpy but Maruti Udyog Ltd. is prepared for it. Well aware that its market share has shrunk from 85 per cent in its heyday to 50 per cent today, the company is taking a fresh look at its costing, productivity and marketing strategies, Managing Director, Jagdish Khattar, said.

The Joint Managing Director, Yuichi Nakamura, said there was a steady reduction in man-hours per vehicle; from 29 man-hours in 2001 to 21 now and a projected 12 in three years. This could cut costs by up to 30 per cent and help MUL maintain a "winning price'' in the hot car market with more models being launched early 2003. Increasing productivity without additional investment, cutting wastage and rejections at the Gurgaon plant and at the level of component suppliers (more than 300 now) are part of Challenge Fifty, a three-year strategy planned by MUL. One important exercise has been robotic technology developed inhouse. "In the next few years there will be changes in the car market and not all of today's players may still remain. Only those with a minimum capacity of two lakh vehicles and more can remain competitive,'' Mr. Khattar said. Maruti had the advantage of five lakh cars per year capability at its existing plant. The Maruti 800 will continue to be made as the entry-level market could only keep growing. "We will announce changes in prices early next year along with new models,'' he added. Information technology will be used to streamline the supply chain from plant level to marketing with innovations such as online ordering and stock information for dealers, K. K. Kumar, advisor-engineering, said.

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