Maruti begins production at Manesar plant

Maruti Udyog Ltd has started production of cars at its new plant in Manesar and hopes to reach full production capacity of 3,00,000 units in the new plant by the middle of 2008.

The company, which began production at Manesar last month, has shifted the production of its popular premium hatchback 'swift' to the new plant, company Managing Director Jagdish Khattar said.

Maruti currently has a capacity of around 6,00,000 units at its existing manufacturing facility at Gurgaon and Khattar said the company will initially scale up production levels to 1,00,000 units at the new Manesar plant, in which the company will invest a total of Rs 1,524 crore.

The company will be manufacturing its proposed new compact car at the new facility which will be meant both for the domestic as well as the export market.

Khattar said the company will invest a total of Rs 9,000 crore by 2009-10, of which Rs 4,000 crore will be pumped in the existing Gurgaon facility for launching new models, expansion, automation and for new engine series.

The balance investments would be for the Manesar plant as well as the company's diesel engine plant.

Backed by the massive investments and new model launches, Maruti is eyeing sales of one million cars in 2010. The company, in which, Japan's Suzuki Motor Corp owns 54.2 per cent stake, plans to launch five new models over the next five years.

Backed by high sales and realisations, the company reported a 40 per cent rise in net profit in the quarter ended September 30 at Rs 367.4 crore while its total income (net of excise) shot up 12.5 per cent at Rs 3,540.8 crore.

Maruti to review car prices in December

India's biggest carmaker Maruti Udyog Ltd today said it will review car prices in December this year.

"We will take a call in December for a price review from January," Maruti Managing Director Jagdish Khattar said when asked whether the company plans to hike car prices.

Maruti had last reviewed car prices in August this year, when it raised them by 0.17-1.47 per cent, translating into a hike ranging between Rs 500 and Rs 5,000.

Cars covered under the last review included the 'Alto', 'Maruti800', mid-size 'Esteem' and van 'Omni', though others like the 'Swift' and 'Zen' were spared.

Khattar, however, refused to specify the models which can see a price review or the possible quantum. "How much and when cannot be specified now," he said.

Buoyed by higher sales and realisations, the car market leader today reported a 39.8 per cent rise in net profit for the quarter ended September 30, at Rs 367.4 crore against Rs 262.6 crore in the same period last year.

The company, 54.2 per cent owned by Japan's Suzuki Motor Corp, said the total income (net of excise) in the period grew 12.5 per cent in July-September 2006 period at Rs 3,540.8 crore from Rs 3,146.8 crore in the same period last year.

Maruti Q2 net up 39.5 pct, sells more cars

Maruti Udyog Ltd. reported a rise in line with forecasts in quarterly net profit as demand for its fuel-efficient small cars outpaced rising raw material costs in a booming market.

New Delhi-based Maruti, majority-owned by Japan's Suzuki Motor Corp., said July-September net profit rose to 3.67 billion rupees ($81.1 million) from 2.63 billion rupees a year earlier, marginally ahead of a forecast of 3.62 billion rupees in a Reuters poll of 10 analysts.

Maruti's sales, including the popular Zen, Alto and Swift models, rose 12.2 percent to 157,683 units in the July-September fiscal second quarter. April-June sales were 144,948 vehicles.

Maruti shares, valued at $6 billion, gained 23 percent in July-September, outpacing a 12.9 percent gain on the BSE auto index.

Centre to sell Maruti stake to PSU banks

The government has set in motion the process of exiting Maruti Udyog with an eye to sell its remaining 10.27% stake in India's largest car manufacturer by the end of the current fiscal.

Sources said finance ministry had initiated consultations with other ministries on the issue and was expected to float a cabinet note soon. It is, however, playing safe and is planning to replicate the earlier model of selling the stake to state-owned banks, financial institutions and insurance companies through a process of competitive bidding.

The government plans to use Maruti's closing price for July 29 (Rs 926.70) as the reserve price for this tranche of stake sale. At this price, the Centre can mobilise Rs 2,700 crore from the equity sale.

The government, during NDA regime, sold a part of its stake to Suzuki, its joint venture partner in India's largest car manufacturer, at a negotiated price. It followed it up by divesting a 25% stake through a public offer. In January this year, following a change of guard at the Centre, government opted to sell 8% stake to public sector banks, FIs and insurance firms, which helped it raise over Rs 1,560 crore. Recently, the cabinet approved the allotment of 20 shares each to the 3,500-odd MUL employees at a discount.

Unlike opposition to disinvestment in PSUs, government does not see any pressure on MUL sale with the allies not opposing the move, saying that the firm has already been privatised and even the government nominee on its board has been withdrawn. The heavy industry ministry too is on board and the proposal to sell the remaining stake had come from it. In fact, finance ministry had earlier this year advised the heavy industry ministry to postpone the sale for a while, hoping that the market conditions would improve.

The move comes at a time when the government is under pressure to meet the fiscal deficit and revenue deficit targets for the current fiscal with expenditure ballooning during the first half of the fiscal despite revenues remaining buoyant.

Govt plans to sell residual stake in Maruti within FY07

The government may sell its remaining stake in Maruti before the end of this fiscal year, that’s before the end of March 31, 2007. It is to place the issue before the cabinet shortly. CNBC-TV18 finds out more.

Now the government has decided on the price on the basis of the company's NSE closing price on 26 June 2006, which was Rs 926.10. On that basis, the money is expected to be raised should be around Rs 2,700 crore.

But the government wants to put up a competitive bidding, so that they could get higher prices for the stake. They are expecting to raise more than Rs 3,000 crore.

For this, the government is expected to take the same route as they did in January 2006 by selling 8% of its scheduled stake at the cost of around Rs 1,800 crore. But this is not a stake sale to Suzuki, instead it is to the FIIs and public institutions.

The Department of Disinvestment has been advised to structure this offer as a private placement to domestic banks and financial institutions. So the government is expecting the banks and financial institutions to quote higher prices by taking the same route. SBI Caps and KMCL are likely to appointed as the merchant bankers.

Also, since the government has just 10.2% left in that company, there will be no public issue or no sale to the employees.

Alto-Betim punter wins Maruti Swift at Casino

Customers generally hope to win big when they visit Chances Casino in Dona Paula and this time, a punter struck the mega jackpot — a Maruti Suzuki Swift car.

Gracel Gonsalves of Alto-Betim was the lucky ticket holder, which was drawn from among 1.2 lakh tickets at a raffle draw.

The raffle, which was drawn at a special function at Chances Casino as part of its Diwali celebration on October 20, also featured prizes, which included return tickets to Mumbai and Bangalore sponsored by Kingfisher Airlines and Holiday Packages at leading five-starred hotels in India.

Others present on the occasion included Dr William and Muriel Britto, proprietors of Chances Casino, Phil Sanders, Casino Operations Director and Francisco Fernandes, Casino Manager. The celebrations included live music from Purple Rain, Broadway Dances and a grand buffet to keep everybody happy.

Here comes the Raid again

She started preparing for the Raid last year! So how does she fare?

I hate numbers. They never seem to add up. I find most efforts to quantify things a tad too disturbing, which is why till date, TSD rallies still remain a mystery to me. So at last year’s Raid De Himalaya Reliability Trial, I announced out of the window of my eight-year old Maruti 800 to both man and mountain that I would be back in 2006 driving a Maruti Gypsy in theX-treme category.

The year went by faster than I had expected, and with less than a month to go for the 2006 Raid, there was still no sign of what was to be the most integral part of my enterprise — a Gypsy.

But somewhere in the middle of all hell breaking loose and meeting a psychic who told me that I was a mermaid in my past life, I decided that not going for the Raid was just not an option. This was no time to go que sera sera. Whatever would be would only be if I put my head to it.

Which wasn’t difficult because in my head I had been going sideways, negotiating the fast-medium-right-onto Batal bridge for a while now. So after 727 fights, 392 tantrums and endless fits of rage, I found myself looking at what was in all actuality my rally-ready Gypsy. Next stop, Shimla. Note to self: seemingly violent behaviour and sheer pigheadedness actually yield results.

Top pick at Suzuki is profit

Suzuki Motor is relinquishing its ranking as the world's biggest maker of minicars, the pool-table-size autos that crowd Japanese streets, but beating No. 2 Daihatsu Motor in the stock market.

Suzuki will make 5.1 percent fewer minicars in Japan this fiscal year to focus on selling more profitable compact vehicles in Asia and Europe. Daihatsu, a unit of Toyota Motor, is building a new factory to expand minicar sales.

So far, investors prefer the strategy of Suzuki, whose shares have surged 48 percent this year to become the fifth-best performer in the Nikkei 225 stock average. Daihatsu stock is down 12 percent.

Demand for vehicles in India, China and Eastern Europe will rise faster than in Japan, according to Credit Suisse Securities Japan. Domestic sales have slumped for the past six months.

"I like Suzuki because it is an aggressive company," said Ichiro Takamatsu, chief investment officer at Alphex Investments in Tokyo. "Investors are looking for a chance to buy companies with quality, and Suzuki is one of them."

Japan is the only country with a legally defined minicar category, and the only country where making them is profitable. The Smart minicar, made by DaimlerChrysler, the world's fifth-largest automaker, has never made money.

Shares of Suzuki rose 0.6 percent to ¥3,210 on the Tokyo Stock Exchange on Thursday. Daihatsu shares declined 0.3 percent to ¥1,121.

Japanese minicar sales may exceed two million units this year, a record, as drivers strive to cut spending on fuel and benefit from lower taxes. The growth has enticed rivals including Nissan Motor and Mitsubishi Motor to bring out new minicar models, stealing market share from Suzuki and Daihatsu.

Suzuki, based in Hamamatsu City, southwest of Tokyo, has responded by trimming minicar production in Japan by 60,000 units over two years.

Suzuki's overall domestic production will rise 2.5 percent to 1.16 million vehicles in the year ending March 31. Its overseas sales jumped 9.9 percent to 588,000 units in the five months through August. Daihatsu sales abroad were little changed at 65,354 units. The Osaka- based company plans to raise domestic output 20 percent to 1.09 million units in fiscal 2007.

"I chose sales and profit over market share in Japan," Suzuki's chairman, Osamu Suzuki, said at a press conference in August. The company announced a plan to spend ¥60 billion on a new factory to start production in 2008. The factory, to be located in Shizuoka prefecture, will not build minicars at all.

Investors are willing to pay more for Suzuki, whose shares trade at 25 times earnings. Daihatsu's price-to- earnings ratio is 14.2, slightly less than Toyota's 15.8.

"Suzuki's strategy is driving the share price higher," said Hitoshi Yamamoto, president of Commerz International Capital Management in Tokyo.

Suzuki, also the world's third- biggest motorcycle maker, was faster than Daihatsu in expanding abroad. It was the first Japanese automaker to build vehicles in India in 1983 and owns 54 percent of Maruti Udyog, a New Delhi company that makes half the country's cars.

Govt to shed remaining stake in Maruti Udyog

The government wants to shed its remaining 10.27 per cent stake in Maruti soon.

The finance minister is pushing for a sale before the Winter session of parliament.

The decision comes less than two months after Chidambaram had said the government should wait for the stock markets to stabilize.

Heavy Industries Minister Santosh Mohan Deb is also signaling green. He argues that there was no merit in holding just over 10 per cent stake in the company.

In June this year, the government stopped having any representation on the board of Suzuki.

The government can raise Rs 2,200 crore by selling the stake and it needs the money for social schemes.

A decision on whether the stake will be sold to a PSU bank as happened in January last year or through a public offer will be taken soon by a group of officials headed by finance ministry.

In 2002, the government handed over majority stake to Suzuki. A year later it shed 27 per cent of its stake through an IPO and then sold eight per cent in January 2005 to raise Rs 1400 crore.

The deal is likely to go through because the Left has not raised any objections.

But sources say this is just the beginning. The finance ministry is preparing a list of PSU's in which minority stake can be sold after negotiating with the Left.

Maruti plans expansion in overseas market

Maruti is busy diversifying its exports and is bullish that the efforts will make up for the loss in exports to Europe. The company is seeding the small car markets globally, reports Economic Times.

Maruti`s exports to non-European countries have grown to 23,696 in 2005-06, a jump of over 78% over last year. According to sources, this is likely to cross 42,000 in the current year. The steady decline in exports in 2005-06 was a result of the company`s decision to stop exports of Alto, the brand which constituted nearly 80% of its total exports to Europe, from India. The discontinuation of Alto sales in Europe followed Maruti`s parent Suzuki`s plan to sell Swift in Europe, made at its Hungarian plant.

Algeria has emerged as Maruti`s largest overseas market with sales growing from few hundred in FY`02 to over 6,500 (FY06). The company says it may cross 9,800 this year.

Maruti is quite bullish on markets like Chile, Morocco, Egypt and Sudan, apart from the neighbouring countries. The auto major expects its exports to Chile and Morocco to go above 5,900 and 2,300, respectively, this year. Its volumes from there have moved from under 700 in FY`02 to 3,115 (FY`06), and exports to Sudan was nil two years back.

Meanwhile, Maruti is also reporting a high on current year exports to the neighbouring countries. The company expects to export 9,200 units to Sri Lanka this year, a growth of over 50%, 1,200 units to Nepal, over 1,175 to Bhutan and 700 to Bangladesh.

Maruti, which saw exports dip by 29% last fiscal, also plans to launch a new export model during `08-09, which will target the European market. The company targets to export one lakh units of the model annually.