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Rediff.com  » Business » Daimler drives out of BIFT bay

Daimler drives out of BIFT bay

July 31, 2004 12:23 IST

DaimlerChrysler India has come out of the Board of Industrial and Financial Reconstruction ambit.

Sanjiv Sahajwala, director (sales and marketing), DaimlerChrysler India, said the company had posted a profit before tax of Rs 34 crore (Rs 340 million) on a turnover of Rs 430 crore (Rs 4.3 billion) last year.

This year DaimlerChrysler was hoping to post a turnover of Rs 500 crore (Rs 5 billion).

The company had made a mandatory referral to the BIFR in 1999 after 50 per cent of its net worth was eroded. Accumulated losses, at present, were at Rs 270 crore (Rs 2.7 billion) on an investment of Rs 600 crore (Rs 6 billion).

The company was looking at a 15 per cent growth. In the previous year DaimlerChrysler sold 1,581 cars and was expecting to sell 1,800 units in the current year.

Sahajwala said out of 1,800 cars, 1,700 across S, E and C class would be assembled at the company's Pune facility.

He also said 20-25 per cent of the company's sales in the future would be from pre-owned cars and DaimlerChrysler was working a retail model for the purpose.

In Kolkata the company sold 35 units last year and was looking at 50 units in the current year. Sahajwala said the company was looking at a 20-25 per cent growth from the city.

He said the purchasing power was not an issue in Kolkata and infrastructure was also fast developing. However, Kolkata ranked ninth among the share of Daimler's sales across the country. Sahajwala said the company is looking for substantial growth in India, and the sales of Mercs have improved considerably after suffering a low in 1997.

He said although the company was still in the red, the viability of the Pune assembly plant, which assembles S, C and E class Mercedes, was there.

On the introduction of A class cars, which are priced between Rs 10 and Rs 15 lakh (Rs 1-1.5 million), Sahajwala said launching such cars in India is not a good value proposition. Besides assembling cars, the company also imports models such as Viano, a sports utility vehicle, and Maybach as completely built units.
BS Bureau in Kolkata