Maruti Suzuki likely to launch 800cc diesel small car this year

Maruti Suzuki India is all set to introduce its 800cc diesel engine, currently under development, in a small car that is expected to be a new Alto diesel. The small car will be launched sometime this year, according to RC Bhargava, chairman of the company.

Speaking at a press conference to announce Maruti’s fiscal results, Bhargava said the engine has been developed by Suzuki, Japan. The same 800cc diesel was touted to power the new light commercial vehicle (named Carry) that Maruti has been developing to mark its entry into the LCV segment. Officials, however, were non-committal as to when the diesel LCV will be launched but the diesel Alto is likely to roll out before the diesel Carry LCV.

Maruti is also working on making various advanced safety features available even in its entry level cars besides airbags. These include the anti-lock braking system (ABS) and electronic brake force distribution among others. At present Maruti does not offer ABS in either the Alto 800 or the Alto K10 in the Indian market but these options are available for export markets like Algeria.

MD and CEO Kenichi Ayukawa confirmed the same saying, “We are working on it,” while expressing a need for a safer driving environment through enforcement of laws. He added that the small 800cc diesel engine being developed by Maruti Suzuki will have a production capacity of 100,000 units per annum. The company is also looking to introduce automatic transmission in several new models going forward.

At present, the carmaker has a production capacity of 1.5 million vehicles annually from 5 plants – three at Manesar and two in Gurgaon. Work at the new manufacturing facility in Mehsana district in Gujarat is underway with the plant to be inaugurated by early 2017. The Maruti Board has sanctioned a budget of Rs 845 crore as cash inflow for work on the plant for this year.

Meanwhile, the auto gearshift Celerio hatchback and the new Alto K10 AGS continue to have a waiting period of 6-8 weeks. Magneti Marelli the key supplier of the AGS kit, is to inaugurate a plant at Manesar for the components for supply to both Maruti and Tata Motors by Q3 of this year. That should streamline supplies to some extent as the kits are currently being imported from Italy.

The AGS trim constitutes 40 percent of total Celerio sales that are currently pegged at 5,000 units monthly and 14 percent of the new Alto K10. Cumulative Alto sales in FY2014-15 were in the range of 264,000 units. Ayukawa confirmed that the waiting period for the AGS models would be streamlined in stages as capacity for the AGS kits is scaled up. The first enhancement to the AGS models would be made in September-October this year and would be followed by a further ramp up by end-FY2016 to take the volumes upto 200,000 units annually for the AGS  trims.

The Ciaz sedan is currently being sold off the shelf and has a waiting period of a week in some regions.

The company’s net profits for the fiscal stood at Rs 3,711.2 crore, an increase of 33.4 percent compared to 2013-14. In a statement, the company said that higher volumes, a favourable foreign exchange rate and material cost reduction initiatives contributed to the bottom line performance. For the last quarter of the fiscal (January-March 2015), the company sold 346,712 vehicles, a growth of 6.7 percent. Of this, exports were at 29,542 units, a growth of 12.4 percent.

During the quarter, net sales stood at Rs 13,272.6 crore, up 12.3 percent over the same period a year ago. Net profits for the quarter stood at Rs 1,284.2 crore, a gain of 60.5 percent.  Maruti bagged six slots in the top 10 models for 2014-15 with the Alto on top as usual though sales for the year were just two percent over year-earlier numbers. The Celerio also entered the Top 10 with 68,143 units sold for the first time. While the company sold 12,92,415 units during the year, a growth of 11.9 percent over the previous year, exports at 121,713 units were up 20 percent.