A-Star compact to treble Maruti’s exports

Maruti Suzuki’s exports are set to zip in the fast lane with the launch of the A-Star compact. The launch of the new model, primarily targeted at the European markets, will nearly treble the share of exports to overall sales to 20% by fiscal 2010-11 against the 6.9% last fiscal, company officials said. Officials said the new compact car, to be unveiled at the Paris Motor Show on October 2, would start selling in Europe from beginning next year. “While we would sell the car in India by October-November this year, exports would start only by early next year,” officials said.Importantly, this is the first car from Suzuki’s stable that would be solely manufactured in India for the world market. Maruti has so far exported over 531000 units of different models from India since 1986 and the production of the A-Star will boost the foreign shipments manifold.The company plans to produce 2 lakh units of the A-Star and half of these would be exported to Europe under the ‘Alto’ brand. Of the remaining 1 lakh units, the company will sell half in the domestic market while the other half is likely to be sold to Nissan Motors that will sell it overseas under the ‘Pixo’ brand. Officials said with the boost from A-Star, Maruti’s exports would jump to 2 lakh units by 2010-11, the year when it expects overall sales of one million units. While half of the export numbers would come from A-Star, the rest would be from the existing models. And to handle the higher volumes, the company has tied with the Adani group up for a dedicated car terminal at Mundra port in Gujarat where they are investing Rs 100 crore. Vaishali Jaju, automobile analyst at Angel Broking, said the A-Star would benefit the company by opening up the European market. “The high export volumes will also help the company insulate itself from any downturn in the domestic market,” Jaju said. She said profit margins could be a cause for concern, as exports tend to provide lesser margins against sale in the domestic market. “This is something that has to be seen carefully,” Jaju said.

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