New Delhi, Nov 19 : Maruti Suzuki India, the country's top car maker, is worried about adverse economic conditions but expects new models to help it maintain last year's production and sales volumes, said Chairman R.C. Bhargava at the launch of Maruti's A-star hatchback on Wednesday.
Maruti, 54.2 per cent-owned by Suzuki, has more than half of the Indian car market. It sold 711,824 cars in the local market in the fiscal year ending March and exported 51,669 cars, industry data showed.
"Slowing down so far is really not the kind of slowing down which I think most people trying to say we are having. The next five months, again very difficult to predict. Our expectation is that we do not expect sales and production this year to go below last years figure," said Bhargava.
High borrowing costs and a slowing economy have hit car sales in India. Sales have fallen from a year earlier in three of the past four months, and an industry body has said the challenge was to sustain single-digit growth in the fiscal year to March 2009.
Bhargava said Maruti's sales in the first seven months of 2008-09 were four per cent higher than a year earlier, but commodity prices had hit profitability.
"But I would imagine that the export volume could in the worst circumstances may be come down to around 150, 000. in the good circumstances it could reach to 100, 000 or more, it depends how the thing goes but I think the range could be around 50 000 cars," he said, adding benefits from the recent falls in commodity prices were expected to be seen from February.
When asked whether the current recessionary trends are affecting the sales and the turnover of the company, Bhargava said that the company has sold more cars in this period than in the last year.
He also added that with the global meltdown and the fluctuating fuel prices, people are taking to small cars and that would help the company.
"I don't think this is the worst recession, I don't see where so much recession is because as I said we have sold till October, more cars than we had sold last year and the demand for some of the models is still very strong.....I think the world trend is towards smaller cars now as you have seen in the USA and in Europe, SUVs and the larger fuel guzzling vehicles have all lost enormously in the market place and I think even if the crude prices have come down in the last couple of weeks, I think people are not going to easily forget that they could go up against to 150 dollar as they did . So I think people would be more cautious in the kind of vehicle they buy and I think they will move towards more fuel efficient cars," said Bhargava.
The A-star, the company's eighth new model in the last three years, will have a base price of 346,775 rupees.
Maruti will export the A-star to Europe from January. It expects its total vehicle exports to reach 200,000 by 2010-11, Bhargava said.
Bhargava said Maruti expected it would get an order early next year from Japan's Nissan Motor Co. under a contract manufacturing deal struck in 2006.
Maruti had earlier said it would make 50,000 cars for Nissan, but today Bhargava said that was yet to be finalised.
Shares in Maruti rose 0.7 to 516.50 rupees in a Mumbai market that closed down 1.8 per cent.