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Maruti projects nil export growth for '99-00

Faced with a contracted market abroad and an ageing line-up of models in its stables, Maruti Udyog Limited has projected a zero growth in exports during the 1999-2000 fiscal.

According to an internal assessment, MUL does not expect export turnover to grow beyond the previous year's $ 90 million mark in view of a recession-hit international market and introduction of several new models of compact cars by global players.

''The company is, in fact, now working towards maintaining the same volume for export markets as in 1998-99,'' sources said. MUL's export turnover had dropped from around $ 110 million in 1997-98 to $ 90 million in 1998-99.

The projections have been made in view of the several developents abroad, including a sqeezed demand and even introduction of euro.

''The euro has made our cars expensive, thereby affecting our performance on the export front. Besides, all our products in the export basket are old models when compared to international standards...

"We have to compete with several new models like Hyundai Atoz, Daewoo Matiz, Fiat Sciento, Seat Arosa, Ford Ka and Volkswagen Lupo. The novelty factor comes to play in these markets putting our cars at a disadvantage.''

The company has projected that Europe, which is a major market for its Alto, would not witness any growth during the year. Besides, sales are also likely to be lower in the African and South American markets, which are in the thick of a major recession. However, it is looking forward to some improvement towards the end of 1999, the sources added.

Maruti's export basket consists of Alto -- which is a variant of the Zen -- the Maruti 800, the Omni and the Gypsy. Of the previous year's total export sales of around 25,000 vehicles, Alto accounted for around 18,000 units followed by Maruti 800 with 4,500 units, the Omni (1,000) and the Gypsy (700).

While the Alto had captured a major chunk of the European market, the Gypsy was a major draw in the African countries. However, the Alto is now facing competition on the export front from several new entrants like Atoz, Matiz and Subaru Arosa, Daihatsu Cuore and Sirion and Renault Twingo.

It may be recalled that during the 1998-99 fiscal, MUL had witnessed a major drop in its sales on both domestic and export markets.

It had recorded a 20 per cent drop in net profit, the sharpest ever decline in the automobile major's 17-year history. Its profit after tax stood at Rs 5.22 billion as against Rs 6.52 billion the previous year. The profit before tax was down by 19.85 per cent to Rs 7.83 billion from Rs 9.77 billion.

The total income also took a dive to Rs 81.18 billion from Rs 84.74 billion, losing ground by 4.20 per cent.

Faced with difficult market conditions and pressure on margins, the company's internal generation went down to rs 668 crore from rs 793 crore.

Despite a drastic cut in prices of most of its models, MUL's total sales of vehicles had declined to 309,094 from 327,264 units. Production was down to 332,931 from 354,336 units. Exports too suffered and dropped to 24,410 units as against 25,994 units the previous year.

UNI

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