Maruti Udyog Ltd [Get Quote] cautioned on Tuesday that infrastucture constraints could prove to be dampner for Indian car industry's global aspirations, while identifying hardening interest rates, enhanced competition and commmodity price volatility as risks facing the company.

"India has the potential to manufacture compact car competitively for the rest of the world... (however) infrastructure constraints could prove to be a bottleneck in the Indian car industry's global aspirations.

"The limited capacity of our ports and railways, for example, could constrain our capability to deliver factory-fresh cars intact in large numbers in the exports markets," company Managing Director Jagdish Khattar told shareholders in the annual report for 2005-06.

At the same time, the report said: "MUL is exposed to a variety of risks because of the the change in demand dynamics as a result of increase in commodity prices, crude oil prices, interest rate, currency exchange rate etc."

As part of efforts to mitigate these risks and ensure returns on its huge investments in India, the company was working on five new models for launch in the country, it said.

Khattar lauded the eight per cent excise duty cut on small cars in this year's Budget and said this would help realise the government's plan to boost growth in the segment and encourage fresh investments in it. However, he added that car companies "will need to scale up their volumes, which in turn will enable them to attain global cost and quality on a sustained basis."

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