Shareholder proposes luxury cars, Maruti disposes

NEW DELHI: With Maruti Suzuki commanding 52.54 in step with cent market proportion of mass passenger vehicles, a few of its shareholders need the corporate to think larger and input the luxurious segment, however it's satisfied to concentrate on its strength.

During the 37th Annual General Meeting of the corporate held here these days, one of the shareholders identified to the control that it used to be time for Maruti Suzuki to consider competing with the likes of Mercedes-Benz, BMW and Audi.

The logic behind the recommendation used to be that MSI already has over 50 in step with cent market proportion within the mass segment and it used to be time to move up the price chain.

Responding to the recommendation, MSI Chairman R C Bhargava said the corporate's effort can be to provide options which can be found in luxurious cars within the corporate's reasonably priced merchandise.

"Today we have the new Ciaz, which has a lot of the features that you find in the 'premium sector' cars and at a much lower cost," he said.

Bhargava further said, "Please remember that India is a country where people are very very price sensitive (and) affordability is a factor."

He additionally said that selling high-priced and small quantity merchandise didn't fit into the corporate's strategy.

"Maruti's strength is bulk manufacturing in large scale, Bhargava said, adding, "and small quantity gross sales, what some of the premium producers do, simply does now not fit into our business type".

He said, alternatively, it does not imply that the corporate's customers can be deprived of the premium options.

"We will keep making improvements to our cars and we can keep making improvements to what price we give to our customer however this decision of what cars must we make, I request you to kindly let the board decide," Bhargava said.

In the April-June length of the ongoing fiscal, MSI's market proportion in passenger vehicles market greater to 52.54 in step with cent from 50.43 in step with cent within the year-ago length.

The corporate bought 4,58,967 units of PVs within the April-June length as in opposition to three,67,386 units within the year-ago length, a enlargement of 24.93 in step with cent.

For the overall industry, home PV gross sales within the first quarter of the present fiscal grew 19.91 in step with cent to eight,73,501 units as in opposition to 7,28,483 units.

Addressing a priority over "stagnating margins" raised via every other shareholder, Bhargava said working margins were not completely within the fingers of the corporate as many extraneous factors reminiscent of foreign currency echange charge commodity costs and global industry issues additionally played a role.

Despite that, he said MSI's working margins "have been higher than another automobile corporate in India" and probably the greatest on this planet.

Earlier, addressing the shareholders, Bhargava said the potential industry war between the USA and China could lead to other countries additionally being drawn into this unfortunate course of events.

"Oil costs, and the Iran problem, create a great deal of uncertainty about power prices this year. Both those events could lead to offsetting some of the advantages of the positive factors," he added.

Bhargava identified healthy enlargement of the financial system, good monsoon and tax compliance under GST enabling businessmen better investments for modernisation and enlargement of their corporations as main positive factors.