Osamu Suzuki to visit India as Maruti sales keep sliding
Concerned about the falling market-share and declining profits of India's largest car manufacturer, Maruti Suzuki India Ltd, Osamu Suzuki, chairman of Japan's Suzuki Motor Corp, is this week making an unusual one-day visit to take stock of the situation himself.india Updated: Jan 20, 2013 21:54 IST
Concerned about the falling market-share and declining profits of India's largest car manufacturer, Maruti Suzuki India Ltd, Osamu Suzuki, chairman of Japan's Suzuki Motor Corp, is this week making an unusual one-day visit to take stock of the situation himself.
Suzuki, whose company owns a majority 54% stake in Maruti, will attend the upcoming board meeting this Friday and is expected to ask Maruti executives to pull up their socks.
This is the first time in almost five years that Suzuki would be attending one of Maruti's quarterly board meetings.
Normally, the 82-year-old head of the world's 9th largest automobile manufacturer visits his Indian subsidiary only during the annual general meeting, held in September.
The present visit comes after one of the company's worst-ever quarterly performances in the July-September period, when its domestic market share slipped to a new low of just 37.5% and profits declined to just Rs. 227.5 crore.The company will announce its results for the October-December quarter after Friday's board meeting.
"Yes it is unusual for him to attend a board meeting at this time of the year but as a member (of the board) he is more than entitled to do that," said a senior company official.
"The domestic market for cars is not very buoyant right now and the yen appreciation has hurt our profitability. Suzuki's visit is more to do with his wanting to understand the ground situation first up and draw up future strategy... don't think he is coming here to make any immediate significant changes."
The company's performance has been battered by persistent labour problems at its Manesar factories that make the bestselling Swift hatchback and sedan Dzire, and an unfavourable currency fluctuation.
It has also faced stiff competition from new small cars from Volkswagen, Ford, Toyota and Nissan in the last couple of years. Maruti's operating margin too has languished in single digits for the last six quarters.
Maruti is important in Suzuki's global operations, and accounts for almost 40% of its global sales and almost a fourth of its revenues. Since 2007-08, Maruti sales in India has been topping parent Suzuki's sales in its own home market in Japan.