Suzuki not to increase stakes in Maruti so soon

Suzuki Motors have no immediate plans to expand its investments in Maruti Suzuki India in near future. However the company might plan to do it looking at the conditions of the Indian car market.

It was believed that Suzuki was planning to make an increment of 5 per cent in its stakes by purchasing shares from the open market. Reports suggested that the parent company was targeting streamlining control and integrating operations of its largest global unit. But according to Maruti there is no such plan very soon.

RC Bhargava, Executive Chairman, Maruti Suzuki India, said, “There is nothing in that direction we have heard so far. We are not aware of SMC's (Suzuki Motor Company) plans to increase stake in Maruti, but it could possibly happen in the future depending on the circumstances and the Indian market."

Suzuki presently owns about 56.2 per cent stake in Maruti Suzuki India. About 40 per cent of Suzuki’s profits come from Maruti. Sales revenues of about 25 per cent are generated by Maruti, India’s largest car manufacturer, which also has a 40 per cent share in the Indian automobile market. Suzuki planned to increase its global presence by focusing on European and Chinese car market while asking Maruti to cater to developing car markets like West Asia, South-east Asia and Africa. Maruti comprises of about 45 per cent of the cars sold by Suzuki.

With the economic slowdown affecting the car sales of every manufacturer, Maruti still showed a 1.27 per cent increase in sales in the first eight months of this financial year. November 2013 saw a decline of 10.7 percent for the company. The revival of the sales figures is not expected to happen soon. However we can expect this to change with Maruti’s ambitious plans to launch a new range of new models and a wide dealer network which is continuously expanding.

Source: ET