Maruti Udyog's exports have been hit badly due to phasing out of Alto in Europe by Suzuki after the introduction of Swift.
Maruti's exports for April-August have fallen by 16.9 per cent to 13,195 units compared with 15,888 units in the previous corresponding period. Alto contributed more than 90 per cent of the company's exports to Europe, said senior Maruti officials.
"Subsequent to the global launch of Swift in mid-2005, Alto was gradually discontinued from the European market and was replaced by Swift, which Suzuki began sourcing from its Hungarian base. It has created a dent in the company's exports to Europe, which contributed to about 70 per cent of the company's total exports," said Maruti officials.
Consequently, Maruti's dependence on Europe has come down to as low as 10 per cent today regarding exports, and non-European market, which contributed to only 30 per cent for Maruti's exports a few years back, has grown to 90 per cent today. Maruti exports a whole range of its vehicles -- Alto, Swift, Wagon R, Esteem and Baleno -- to non-European market.
Its exports in August slipped 25 per cent to 3,596 vehicles, compared with 4,792 vehicles in August 2005. However, this decline has been mainly attributed to the 'irregularity in car carrier shipments' during the month.
Nevertheless, the company has set high goals for augmenting its future growth, including exports. Maruti plans to increase its capital expenditure by Rs 3,000 crore to Rs 9,000 crore till 2010.
The additional fund will be spent on enhancing capacity at its new plant in Manesar from 1 lakh to 3 lakh units a year by FY08. Of the three lakh units, more than 50 per cent will be exported.
More from rediff