Maruti bets big on diesel models

Mumbai: The country`s largest car-maker Maruti Suzuki has said it will be launching more diesel models to retain its market share that has been under attack for months now. "Our market share has slipped to 40 percent in 2011. This was due to slowdown in the industry and lower sales of petrol models compared with to diesel car production," Maruti Suzuki Managing Director and Chief Executive Shinzo Nakanishi said here.

The company will now focus on producing more diesel models. The company will be able to produce 300,000 diesel engines a year through the Suzuki Powertrain, a joint venture of Maruti and Suzuki Motor`s Gurgaon unit. Maruti will also buy up to 100,000 diesel engines annually for three years from Fiat India under a pact between the Italian carmaker and Maruti`s parent Suzuki Motor Corp.

This is expected to help the company to produce more diesel cars, Nakanishi said. Customer preference here is fast shifting to diesel cars as the fuel is cheaper than petrol. The shift has prompted auto makers to introduce new diesel variants and increase production of existing variants. Players like Ford have also announced plans to invest on diesel engines.

Maruti`s Swift, Ritz, Swift DZire and SX4 models are sold with 1.3-liter diesel engines. Meanwhile, Maruti has witnessed a turnaround in monthly sales after seven consecutive months of decline with a 5.18 percent spike in sales to 1,15,433 units in January. It had sold 1,09,743 units in the same month last year. Last December its sales had declined 7.1 percent to 92,161 units.

"Following the turnaround in the auto industry, our first target will be to quickly cover growth of 10-11 percent as we have had a negative growth of 17 percent during April-December 2011 period," Nakanishi said. Commenting on the Gujarat plant, Nakanishi said, "we have entered into an agreement for land at Mehsana in Gujarat. The Gujarat plant will commence production only after we reach full capacity at our Manesar plant (1.8 million).