Maruti to gain from Mazda deal - Times of India

The author has posted comments on this articlePankaj Doval, TNN | May 13, 2013, 06.04AM IST NEW DELHI: Maruti is set to benefit from a deal parent Suzuki has signed with Mazda for contract manufacturing of Ertiga MPV. The Indian car major will get an opportunity to sell petrol-engine kits of the Ertiga under the deal as it currently supplies the model in CKD (completely-knocked down) kit form to Suzuki Indonesia. The Indonesian market for MPVs is very strong and is believed to account for a substantial portion of the estimated one million vehicles sold in the country. The Mazda deal is expected to give incremental revenues to Maruti. The deal will be even sweeter for Maruti as the company will get an opportunity to utilise the petrol capacity that has been lying mostly idle as more and more Indians lap up diesel models and variants. Maruti's current CKD kit supplies to Suzuki Indonesia are estimated at over 50,000 units annually, and this will get a fillip once deliveries to Mazda begin. Mazda will re-badge the vehicle. When contacted, a spokesperson for Maruti refused to comment on the development. Maruti's supplies to Suzuki Indonesia include engine components and other parts for the Ertiga. Suzuki's new tie-up was known last month when Mazda announced it to its shareholders at its annual financial results event. This is not the first time that Maruti is benefiting from acontract manufacturing deal initiated by parent Suzuki. The company also contract manufactures the A-Star compact for Japanese maker Nissan that sells the model as Pixo across Europe. However, while the partnership started on a high note with annual supplies envisaged at around 50,000 units, the economic woes in Europe have impacted its potential and now only a tenth of this is understood to be supplied to Nissan. When contacted, analysts at brokerages said the Mazda deal comes as a positive for Maruti. "However, more needs to be known about the leve l of additional supplies that Maruti will get from this deal," one of the analysts said. Maruti has been trying to work on new markets to stabilise exports that have been affected due to the slowdown in Europe. The company's sales in the overseas markets fell 5.5% last fiscal at 1.2 lakh units against 1.27 lakh units in 2011-12 . New revenue The deal is for Indonesian market were MPVs account for substantial portion of about 1m vehicles sold. Maruti will also be able to utilize excess petrol capacity lying idle after Indians started favouring diesel models. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHEcrUI4Ok98sdUgw0ACsJoUtonrw&url=http://timesofindia.indiatimes.com/business/india-business/Maruti-to-gain-from-Mazda-deal/articleshow/20022976.cms

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