Slowdown in auto growth

This year, the automobile sector in the country grew slower than last year due to a host of factors, including rising steel and fuel prices, Jagdish Khattar, managing director of Maruti Udyog Limited, told reporters here on Wednesday. While more cars were sold than last year, the rate at which they were sold had definitely dipped, he added.

"Steel prices, fuel prices... we will have to see to what extent the car buyer can take the burden of price hikes," Khattar said.

Last year, the sector grew over 25 per cent while in the current fiscal, "even up to February, it has only been around 16 per cent so it will be lower growth," for the year to March, he said.

Maruti, majority owned by Japanese car maker Suzuki, currently has a capacity of some 3.5 lakh units, which Khattar said that the company was in the process of increasing capacity to five lakh. Sales in March, so far, had been good and "if we could do that for all the 12 months, we can even do six lakh," he said.

A diesel engine plant, Maruti is building in Manesar in Haryana, will start working in early 2007, Khattar said. Capacity at that plant will include the worldwide requirements of the Suzuki Group.

"It will be the only source for that engine for Suzuki." The engine is being built under licence from Italian car maker Fiat.

The petrol version of Maruti Swift, a hatchback to compete with cars like the Getz by Korea's Hyundai, will be launched "in a few months" in the country.

A diesel version is also expected next year. Work was increasing too for Maruti's 50 "" engineering R&D team in Delhi, Kanwaldeep Singh, Maruti's spokesperson said.