Suzuki Motor Corp gains upper hand in acquring the stake in Maruti Suzuki to 55%, proving the interest of Suzuki’s businessfor its Indian
subcontinent. According Indian Stake acquistion rules, if a foreign company wants to increase it’s stake, it can do so by only 5% per year. Also, if the stake hold crosses 55% threshold, the foreign company has to make an offer of 20% which, Suzuki might do sooner to taste all the business profits of No.1 Maruthi Suzuki.
If at all more stakes shall be bought by Suzuki, the Indian auto market might be a monopoly with Suzuki ranking first. Also, the 20% stake purchased from Volkswagen might also prove crucial for our market. Maruti Suzuki made a record breaking sales figures for Feb 2010, raising 22% increase one of it’s best sales records. With the introduction of higher fuel efficient K-series engines, Alto, Estilo, Wagon R, Swift, Ritz all have attracted a new attention in the market.
While Suzuki might have long term plans for Indian car market, Maruti is eyeing to increase it’s production per year from 1 to 1.5 -1.75 million in the next strategies. Will the hatchbacks and low-cost production strategy of Maruti-Suzuki, which in fact is same as Tata and Hyundai, be successful? Let us wait for the future..