'Price cut decision only next year'

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'Price cut decision only next year'

BS Reporter in Mumbai

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November 20, 2008
Maruti Suzuki posted a 2.47 per cent sales growth during the first seven months of FY09, while its closest competitor Hyundai grew by 26 per cent for the same period on the strength of brands like the i10.

Excerpts from an interaction with R C Bhargava, chairman of Maruti [Get Quote] Suzuki, after the company launched A-Star, the
company's latest offering.

Would you be able to maintain your earlier target of exporting 150,000 cars to Europe?

In the worst circumstances, we would be able to export 100,000 A -Stars next year. The deal with Nissan to sell 50,000 cars is still on.

The number we quote is indicative and not final. However, given the preference for small cars across Europe, we are hopeful of achieving this export target.

Your exports have never crossed even 50,000?

Last year, we exported 53,000 cars to 40 countries, which is the highest number we achieved.

With the A-Star, we are hopeful of exporting 100,000 cars to Europe alone and another 100,000 to other countries by 2010-11.

After all, the A-Star meets the stringent EU requirements. Its CO2 emissions are the lowest in the category and so is its fuel efficiency. Its recyclability is about 85 per cent.

And it is 20 per cent lighter than conventional small cars. Also, it's easy to drive because there are fewer gear changes.

But we have had to tune the suspensions of the A-Star to suit Indian road conditions.

In the last 7 months, domestic sales have been sluggish. What's the gameplan for the next five months?

The coming months are crucial. It's difficult to predict.

But sales will not be lower than last year's. Being a small car major, it's nice to know that 65 per cent of the sales in the small car segment come from first- time buyers.

With prices of steel softening, are you planning a price revision?

When commodity prices rose, we did not hike prices and chose to absorb the higher cost.

This was reflected in our material costs for the second quarter.

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