Maruti to ramp up AMT production to 5000 units a month

by Shobha Mathur 30 Oct 2014

Maruti Suzuki India (MSIL) is working with its supplier of automated manual transmission (AMT) kits to increase production capacity to 5,000 units per month from 3,500 units at present, over the next two months.

With a new Alto K10 slated for a launch in November, and with it having an AMT variant, it has become imperative for MSIL to have sufficient AMT kits to cater to demand.

“The idea is not to wait for our supplier to first ramp up volumes and then get into AMT for a new model. We are working with our supplier to increase volumes so that the AMT is not provided in one model at the cost of the other,” says executive director, R S Kalsi speaking to Autocar Professional.

Maruti launched its first AMT-equipped Celerio in February. It has an initial waiting period for the AMT variant at 7-8 months thanks to vendor constraints which has dropped to 3-4 months, says Kalsi. The Celerio’s AMT kit is sourced from Magneti Marelli. With demand for this version constituting almost 35-40 percent of Celerio demand, the need to ramp up capacity was imperative.

Kalsi said that once Magneti Marelli establishes its new manufacturing line for the AMT at Manesar,  production will be stepped up still further as several new Maruti models will have AMT variants.

On other fronts, bookings for the Ciaz sedan have touched 17,000 , up from 10,000 around the time of its launch in early October. The company has delivered 6000 cars to dealerships so far. Most customers are upgraders who were earlier using the Swift or rival products.

 Maruti Suzuki announced its half yearly and Q2 results. It sold 321,898 vehicles in Q2, up 16.8 percent. Of this exports were 34,211 units. Net sales were Rs 11,996 crore, a growth of 17.5 percent over the same period in the previous year. Net profit in Q2 stood at Rs 862.crore, 28.7 percent more compared to the same period last year. Growth in domestic sales and cost reduction initiatives contributed to bottomline growth during the quarter. For the April-September period, Maruti sold 621, 792 units, up 14.7 percent. Of this exports stood at 63462 units a growth of 15.2 percent. Net profit was Rs 1624.8 crore, up 24.8 percent. Higher volume contributed to profits.

MSIL’s chairman, RC Bhargava said the board has recommended an increase in FII shareholding from 24 percent to 40 percent.  This will give shareholders more opportunities to buy and sell Maruti shares which was earlier restricted by the FII limit. The approval for the increase in FII shareholding will be taken at a general meeting and subsequently a request for notification will be made to the RBI.

The board has also decided to maintain the dividend payout at between 18-30 percent. The actual dividend for each year will be decided based on availability of cash, profit levels for that year and capital requirements. Bhargava said that while the payout ratio was in the range of 10-15 percent last year, this time, the company having a large cash surplus of over Rs 9000 crore, as investments in the Gujarat facility will be made by Suzuki Motor Company of Japan. MSIL will be in a position to declare a higher dividend and invest more in its marketing network.

So far, MSIL has invested Rs 100 crore in its Gujarat plant that will be paid back by Suzuki once minority shareholders approve Suzuki’s investment plans. The Gujarat plant will be commissioned in May-June 2017.