Maruti Suzuki to cut export of diesel engine to Hungary and sell the same in India

Stocks

oi-Shoaib MD

By Shoaib Md

Published: Friday, August 5, 2011, 16:46 [IST]

Maruti Suzuki India has said that it will cut exports to Hungary to concentrate on the Indian market. The decision has been taken in lieu to keep up with the demand for the new version of its premium hatchback Swift.

The company, which has seen increased competition from new entrants likes Ford Figo, Toyota Liva and Volkswagen Polo, said it will increase production of the Swift to up to 18,000 units a month to reduce waiting period. Honda's upcoming Brio is also expected to add to the competition.

The news-agency PTI has quoted Mayank Pareek, Managing Executive officer (Marketing and Sales), Maruti Suzuki India as: "We are reducing on export of diesel engines significantly to cater to the domestic demand. Currently we export about 35,000 to 45,000 units every year to Hungary. We will reduce it to almost negligible levels in the next six months."

The company's Manesar plant produces 2.8 lakh engines per annum though it requires nearly four lakh units for the Indian market.

"The additional engine that we get (after cutting exports) will go for the Swift in India," Pareek said.

As petrol prices are going up, the demand for diesel engine cars have increased. Companies which offer petrol along with diesel variants of a car model are witnessing demand ratio of 70:30 with bias for diesel cars.

On expected sales, Pareek opines it will be around 18,000 units 18,000 per month. Current sales of the Swift are around 12,000 units a month.

Prices of the new swift is expected to be more than Rs 30,000, actual prices will be disclosed on August 17 at the time of the official launch of the car.

VIEW: If the company manages to get the same kind reponse for the new Swift as it did for the old, then a new round of interest in the stock will be seen on part of the investors.

GoodReturns.in