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Maruti Suzuki profits up, to launch Alto, Wagon R with new generation engine

By Thomas Frommherz for CEOWORLD Magazine Updated:October 26, 2009

Maruti Suzuki India (MRTI.BO) on Saturday reported an impressive increase in its net profit at Rs. 570 crore for the second quarter of 2009-10 against Rs. 296.12 crore in the same period a year ago. “During the quarter, we had good festival season sales and response to our new models was good. Moreover, we also saw robust exports,” Managing Director and Chief Executive Officer S. Nakanishi said here. Net sales grew by 47 per cent during the quarter ended September 30, 2009, at Rs. 7,049.58 crore against Rs. 4,806.26 crore in the same period last year.

Maruti, 54 percent owned by Japan’s Suzuki Motor Corp (7269.T), met forecasts with a 5.7 billion rupees ($122 million) net result in the quarter to September.

Domestic sales grew by 22 per cent at 2.09 lakh units, while exports jumped to 37,105 units from 17,745 units in the year-ago period.

“The A-Star had good sales in Europe as we benefited from the scrappage scheme (incentives given on purchase of new cars for exchange of old cars). We are looking out for newer markets to keep exports momentum,” Mr. Nakanishi said. Talking about the first six months, he said the net profit stood at Rs.1,153.50 crore against Rs.761.97 crore in the same period a year ago, while net sales stood at Rs. 13,389.80 crore against Rs. 9,537.29 crore. The company is investing Rs. 150 crore to raise production capacity at its Gurgaon facility by up to 90,000 units by de-bottlenecking and modernisation.

Maruti Suzuki will launch two of its best selling models -Alto and Wagon R, with a new generation engine as it prepares to meet April 2010 deadline of stricter emission norm.

According to industry sources, the company will discontinue the old F-series engines in both Alto and Wagon R and replace them with its new K-series engine, which is Bharat Stage IV complaint.

When contacted a Maruti Suzuki India (MSI) spokesperson said, “the successful K series engines will be mounted on more models in a phased manner,” without specifying details and timeline for the change in engines.

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