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Old 26th April 2013, 14:53   #1
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Default Maruti's profitability at an all-time high

Source & Full News Item

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Maruti Suzuki announces its financial results for the year 2012-13. The sharing of platforms and parts between the Swift, Dzire & Ertiga, as well as their stupendous success on the sales charts, has led to huge gains on the bottom line. Additionally, unlike some of its competitors, Maruti has managed to keep the prices of its volume sellers steady. While there were a slew of special editions, heavy discounting was far & few between.

The company is rumoured to be developing its own range of diesel engines (news item), a move that will only enhance long-term profit margins.

That said, the coming year is going to be challenging due to overall softening of market conditions.
Honestly, with these kind of figures, I feel Maruti should now venture a little more sincerely into higher category of cars. Why not have a lineup of good C2/D1 segment sedans/premium hatchbacks? It's possibly time that they shed their value for money image, and position some top of the line vehicles. If that means spending money on R&D (we all know about the in-house diesel engine rumours), then so be it.

I, for one, would like to see better sedans than SX4 and Kizashi, priced rightly, and maybe even high performance versions of cars such as Swift. Why not make an effort? With the sales and distribution network they have, it might become a good decision. Even JV with the likes of Mitsubishi might be an option.

Last edited by GTO : 27th April 2013 at 12:28. Reason: Adding our own news item
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Old 26th April 2013, 15:00   #2
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Default re: Maruti's profitability at an all-time high

+1.

The swift sport + Kizashi (Built in India prices) can bring a young, fresh image to the company!

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Even JV with the likes of Mitsubishi might be an option.
They were considering Mazda as one of the options -
http://www.team-bhp.com/forum/indian...d-testing.html (Scoop: Mazda CX-5 SUV spied testing)

However - no updates since almost an year now.

Last edited by CrAzY dRiVeR : 26th April 2013 at 15:02.
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Old 26th April 2013, 15:10   #3
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Default re: Maruti's profitability at an all-time high

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Originally Posted by CrAzY dRiVeR View Post
+1.

The swift sport + Kizashi (Built in India prices) can bring a young, fresh image to the company!


They were considering Mazda as one of the options -
http://www.team-bhp.com/forum/indian...d-testing.html (Scoop: Mazda CX-5 SUV spied testing)

However - no updates since almost an year now.
Mazda would've been a great option as well! It's time that Maruti moves up the value chain; if necessary, there's no harm in launching a separate brand either, but that may be some way off. Right now, even within the same umbrella, they have huge potential to offer sporty cars. In fact, if they source Fiat diesels, there's nothing stopping them from sourcing at least Fiat T-Jet engines, and maybe bring back something like Baleno as C2 segment sedan. I still love Baleno's clean elegant styling.
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Old 26th April 2013, 16:34   #4
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Default re: Maruti's profitability at an all-time high

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Originally Posted by CrAzY dRiVeR View Post
They were considering Mazda as one of the options -
http://www.team-bhp.com/forum/indian...d-testing.html (Scoop: Mazda CX-5 SUV spied testing)

However - no updates since almost an year now.
The story about tie-up with Mazda was only a rumour. The CX-5 was at MSIL Gurgaon R&D purely for the purpose of benchmarking.
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Old 26th April 2013, 16:46   #5
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The story about tie-up with Mazda was only a rumour. The CX-5 was at MSIL Gurgaon R&D purely for the purpose of benchmarking.
Benchmarking against what? They themselves don't have any product in that range! And that too, in diesel.

Forget the Vitara. Maruti isn't even properly interested in importing it, forget benchmarking and research.

Last edited by CrAzY dRiVeR : 26th April 2013 at 16:47.
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Old 27th April 2013, 12:33   #6
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Default Re: Maruti's profitability at an all-time high

It seems that Maruti can simply do no wrong right now : Link to Full News Item.

Relevant products, improved quality, better feature list, highest customer satisfaction and now, a phenomenal jump in net profits. Other car manufacturers must be green with envy.

Here's another interesting number:

2,300 crore profit
10,51,046 cars sold

Net profit per car : About Rs. 22,000.
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Old 29th April 2013, 20:50   #7
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Default Re: Maruti's profitability at an all-time high

MSIl is bound to make profits and more profits if the sailing is smooth! The labour troubles were non-existent during the quarter under review.
The top money spinners for MSIL are the Swift, DZire, Alto, Wagon R and the Ertiga.

The DZire was very recently redesigned and shortened to a < 4000 mm length to avail the Central Excise benefits.The car became an overnight success and rightly so. But did we notice the fact that the prices of this car remained unchanged, despite the Central Excise relief ? Besides, the shorter length meant reduced metal and plastics, but no benefit even on this count was passed to the customer.

MSIL reported that they are launching the DZire in its new design with no price increase/ correction - yes, they overtly appeared to favour the buyers !!! What price increase they were talking of for the < 4000mm DZire?

The old Indigo was also shortened and launched as the Indigo CS by Tata. And Tata Motors passed on the Excise benefit to the customer. Their integrity is incomparable, though the cars lack the refinement and quality as desired today.

The Wagon R and the old Alto designs are outdated and nearly a decade and a half old, but continue to spin money for MSIL.The manufacturing cost of these old designs are lesser compared to the hi-tech cars. The Omni from more than three decades ago also continues to spin money for MSIL and has its own clientele.

The temporary casual workers at the Maruti plants in Gurgaon and Manesar are paid low wages and there are frequent labour troubles, strikes, lockouts and even violence.

While passing around the Gurgaon facility, I noticed hundreds of bicycles parked in the parking lot outside the factory - this space is outside the compound wall and the parking space is evidently encroached upon public land (it appears so) by MSIL. In today's world, bicycles are mostly used under compulsion by the economically weaker sections. Any decent job holding person goes immediately for buying a two wheeler, but there are lesser signs of workers buying bikes/ scooters in MSIL. So, its virtually true that MSIL is not a good employer.

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MSIL's perennial labour trouble needs to be contained by paying money from profits to the workers decently.

The foreign exchange outgo from the profits are not known. What chunks of the profits are repatriated back to the parent company are unknown?

MSIL's USP's are the trusted and quality cars they make,cheap spares, plus the friendly after sales they have with their huge network which seems to be favouring them now.

Last edited by anjan_c2007 : 29th April 2013 at 21:03.
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Old 30th April 2013, 08:04   #8
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Default Re: Maruti's profitability at an all-time high

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Originally Posted by anjan_c2007 View Post
The Wagon R and the old Alto designs are outdated and nearly a decade and a half old, but continue to spin money for MSIL.
There's a news doing the rounds in the media (Link to the News Item) that Maruti is likely to bring the WagonR Stingray to India. That might be a welcome refresh to an old boxy design. Especially if launched with a more powerful engine option, then there could be a good increase in number of customers. I would hope this could be a start of something closer to sporty affordable cars from Maruti stable, though it could only be wishful thinking!

Last edited by Tats07 : 30th April 2013 at 08:05. Reason: Minor correction
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Old 30th April 2013, 11:19   #9
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Default Re: Maruti's profitability at an all-time high

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There's a news doing the rounds in the media that Maruti is likely to bring the WagonR Stingray to India.
This would really be refreshing if it happens anytime soon. Thanks for sharing the news, the designing may not be upto everyone's liking but as it's a Maruti, it will sell. I wonder if any other company in the world has so many products in overlapping price brackets that too on the lower end!

Regards,
Saket

Last edited by saket77 : 30th April 2013 at 11:22.
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Old 30th April 2013, 12:16   #10
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Default Re: Maruti's profitability at an all-time high

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Originally Posted by anjan_c2007 View Post
The DZire was very recently redesigned and shortened to a < 4000 mm length to avail the Central Excise benefits.The car became an overnight success and rightly so. But did we notice the fact that the prices of this car remained unchanged, despite the Central Excise relief ? Besides, the shorter length meant reduced metal and plastics, but no benefit even on this count was passed to the customer.
Agree to the point that Maruti and Suzuki nowadays become very greedy. But I remember there was a slight reduction in price of New DZire (at the tune of Rs 10K), and also, a subsequent price increase to other cars were not effected to DZire. But, Maruti Suzuki enjoyed a tax benefit of about 40K when they shortened DZire, and it was not fully transferred to the customer.

Quote:
Originally Posted by anjan_c2007 View Post
The Wagon R and the old Alto designs are outdated and nearly a decade and a half old, but continue to spin money for MSIL.The manufacturing cost of these old designs are lesser compared to the hi-tech cars. The Omni from more than three decades ago also continues to spin money for MSIL and has its own clientele.
Though the shape remains the same, the New WR and Alto800 are new in all body panels. The WR in India is having the same body panel designs used in their Japanese version. Even the upcoming(?) Stingrey is just a facelift of the current WR. As long as there are about 40 - 45K people who buy these cars monthly, there is no problem in selling these cars, IMO. What about the designs of Hyundai Santro, Accent, Tata Indica, Indigo, the utmost-out-dated-looking cars like Ford Figo, Toyota Etios and Liva? IF you say they have latest designs like i20, Aria, Fortuner etc, so do Maruti have models like New Swift, Ertiga and DZire.

There is no point in bringing rocket-science to small cars and making them out of the reach of common man and making them driving 2-wheelers throughout their lifetime.

But one Maruti and Suzuki can do: as a market leader and having such a huge production, they can definitely reduce the price of cars and also introduce more high-end versions of the current models with a whole lot of features and security systems

Last edited by romeomidhun : 30th April 2013 at 12:22.
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