The country's largest carmaker Maruti Suzuki India said its exports in the ongoing fiscal may decline as global markets continue to be sluggish.
"Export will not be better in this fiscal. It will remain more or less the same as last year or may be even worse. Situation in many global markets has not improved yet," Maruti Suzuki India (MSI) Chairman R C Bhargava said on the sidelines of Hero Mindmine Summit.
In the fiscal ended March 31, 2012 the company's exports stood at 1,27,379 units - a decline of 7.9 per cent from the previous fiscal. The company's export markets include Europe, Latin America, Middle East and South East Asian countries.
MSI is, however, expecting that its overall sales in 2012-13 will grow by 10 per cent, primarily driven by diesel cars.
"We are expecting 1.5 lakh more diesel car sales while the sales of petrol will be down by 50,000 units in the entire year. So, overall, it is likely to be a gain of 1 lakh units," Bhargava said.
In 2011-12, the company's total sales declined by 10.8 per cent to 11,33,695 units from 12,71,005 units in the previous fiscal.
Commenting on the challenges ahead for the new fiscal FY'13, Bhargava said: "The main challenge is the fuel cost. The relative prices of petrol and diesel are going to determine the future of the market. Auto companies are guessing what the prices will be for petrol and diesel in future."
With the company planning to set up a Rs 1,700 crore (Rs 17 billion) diesel engine production unit by 2014 at its Gurgaon plant, he said MSI will be reducing car assembly capacity there.
"We will shut down one car production line out of the three we have now. Currently, we have a total installed capacity of 7.5 lakh units per annum and we will close down one plant of 2.5 lakh units capacity. This will happen only by 2015 when the Gujarat plant will come up."
Bhargava further said: "In Gurgaon we need space for components, specially to produce diesel engines. Production loss at Gurgaon will be made up in Manesar and Gujarat."