Maruti eyes local steel market

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Car market leader Maruti Udyog Ltd is planning to increase its purchase of steel from domestic companies to prune production cost and compensate for increase in steel prices.

Jagdish Khattar, managing director, Maruti Udyog, said the negotiations were on. Cutting on imported steel, apart from saving on direct cost of material will also insulate the company from risks that come with fluctuating foreign currency exchange rates.

Khattar said that under normal conditions, Maruti entered into an annual contract with suppliers over quantity and fixing prices for six months. "This will ensure that supplies are steady (irrespective of price) throughout the year," he said.

South Korea's largest steel maker Posco is one of the key suppliers for Maruti. The company also imports steel from Japan.

Though details of the quantity of steel imported by Maruti is not available, the move to increase domestic purchase of steel is set to benefit Tata Steel the most. Bhushan Steel is another key supplier of auto-grade steel for Maruti Udyog.

The company today also launched a new loyalty programme for its customers by issuing an 'Autocard' in partnership with Indian Oil Corporation and Citibank.

The 'loyalty-cum-rewards programme' will be for the existing and new customers who will get discounts at IOC fuel pumps while they can also use the same as a credit card.

"The Maruti customers can earn and redeem points from their normal car-related and lifestyle spends, and be rewarded handsomely when they buy a new car from our stable," Khattar told reporters here.

The card, which will be issued free of cost, will also enable customers to earn discounts on servicing or while buying accessories at Maruti workshops.

With a strong customer base of over 4.5 million, Maruti says it hopes to enroll around one million customers in the first year itself.