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Car sales will ride growth waves

Khattar gives his assessment of the country's automobile market and Maruti's plans to remain a dominant player in the Indian market.

business Updated: May 12, 2005 20:03 IST

What is your assessment of the car industry for the current fiscal?
The car market will continue to grow for a variety of reasons. The availability of easy finance options and improvement in infrastructure will fuel growth of the automobile sector. With the economy expected to grow at over 7 per cent, the thumb rule is that the auto industry should grow one a half times that. After all economic activity moves on wheels. Our dealers are bullish, buoyant and confident that the sales will continue to grow.

The market is awaiting a new vehicle from the Maruti stable. When can the customer expect the new offering?
The Maruti Swift will be a hot hatch 1.3 litre to be launched later this month. It will be a major offering from the company in the volume game. The vehicle will connect with the youthful aspirations of `New India'.

Ratan Tata has often spoken about a `people's car' with a price tag of around Rs 1 lakh. What is your response to this challenge ?

If he can do it, it will be a great achievement and result in the expansion of the car market. As the market expands, upgrades will also come. But I believe that this question should be asked to Mr. Munjal and Mr. Bajaj after all it will impact their businesses.

With 'Project 50' having been completed, what is the next initiative being planned by the company?
We are now drawing our next three-year programme aimed at raising productivity and reducing costs. There are plans to increase levels of automation and robotization in our existing operations in Gurgaon. In the past three years, we were able to reduce costs of several of our operations. This enabled us to keep costs of our vehicles down, in spite of pressures due to rising input costs. In fact, some of our vehicles today are cheaper than they were at the time of initial launch.

What is happening on the multimillion dollar Manesar plant front?
We have begun construction at Manesar. The project will be under an independent company, where Suzuki Motor Corp has 51 per cent stake. We took this step as we wanted to start on a clean slate. The Manesar plant will manufacture diesel engines in collaboration with Fiat. Apart from this, the company will also manufacture transmission and the much debated gear boxes.

When do we see the first diesel engine from the Manesar plant?
The first diesel engine should be available by end of next year or early 2007. We were keen to introduce diesel engine run vehicles as the market for such products is growing. Maruti did not have any significant presence as Suzuki is a petrol engine vehicle manufacturer.

Will diesel engines be introduced on all Maruti cars?
We plan a gradual introduction of diesel engines in our vehicles. We are keen to have diesel variants of cars and believe that they should be successful as a standalone product and not merely on grounds of a pricing differential between petrol and diesel.

You have straddled an unknown terrain -- from being a bureaucrat to a managing director of a multinational car manufacturer. How have you made this dramatic shift?
I don't think I had hiccups. I am a great believer that those who have worked in government and public sector reasonably well can deliver goods in the private sector as well. If one can function in those circumstances, to work in Maruti has been much easier. I have been through the mill and worked in Cement Corporation of India, Transport Corporation of India and the Tea Board.