India's largest passenger car maker Maruti Suzuki has decided not to commit for any further investments in engines, as the government is yet to come out with an auto-fuel policy, a top company official said.
"We do not know where to invest whether in diesel or in petrol. This has put us in a fix. We are not committing any further investments in creating engine capacity unless there is long a term auto-fuel policy,” Maynak Pareek, managing executive officer (marketing and sales) of Maruti Suzuki said.
On the back of spiralling prices of petrol, the demand for diesel cars is on the rise across the country. The demand for diesel cars was 60 per cent across the industry. According to company officials, this has changed over the last three-four months as about 80 per cent of cars sold now run on diesel.
The company is also mulling the option to source diesel engines from the under-utilised capacity of Fiat's plant near Pune. “We have a licensing agreement with Fiat. Since 2007, we are producing Fiat's 1.3 multi-jet diesel engines at our Manesar facility. So there can be possibility of sourcing engines from out side,” Pareek said.
However, according to him, the matter has not been finalised yet and a lot of engineering works needs to be done for this. “We need to do make technical changes to meet our needs. We need to homologate our cars again to be launched with any Fiat engine in India," he said. Exports:
Meanwhile, Maruti Suzuki is looking at new geographies to ramp up exports due to sluggish growth in the European auto market.
“The European region has witnessed sluggish growth in last couple of years. Morover, European market was affected after the governments stopped providing incentives. This has led us to looking at non-European markets,” Maynak Pareek, managing executive officer (marketing and sales) of Maruti Suzuki said. Last year European countries withdrew schemes that used to give incentives to customers to shift to fuel-efficient smaller cars..
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The company which exports models like Estillo, Alto A-Star and Ritz in the overseas market, is now looking at new markets Asia and Africa. “We started focusing more on South Americans markets like Chilie and Venezuel since last year. Now we are exploring African nations like Egypt, Algeria and Asian countries like Malaysia and Indonesia,” Pareek said.
In the financial 2009-10, Maruti Suzuki had exported about 1.47 lakh and Europe accounted for 80 per cent of that.
The company's export to the European dropped about 40 per cent in last fiscal. However, banking on the non-European market the company managed to export about 1.38 lakh units last financial year.
“In the current financial year we are expecting our export to be somewhere around the last year. Given the European market situation, we will be happy to match last fiscal's export,” he said.