Post-robust results, Maruti plans mid-size drive to keep the lead

Country’s top car manufacturer plans to ramp up Manesar diesel engine plant capacity to 3 lakh in three years

After achieving one of its best years ever in fiscal 2006-07, car market leader Maruti Udyog Ltd (MUL) is gearing up for the next level, which will entail a major streamlining in its engine platforms and a renewed thrust to the mid-size segment. While the auto major is keen to expand its product portfolio across segments, there will not be any addition to its diesel range for sometime to come.

The company wants to take the attack to the opposition, with the new mid-size sedan SX4 to be launched next month. But while product launches are a part of every auto manufacturer’s armoury, Maruti is planning to streamline its operations on the engine to secure its operating margins.

“We are preparing a strategy on the engine front to meet Euro IV and Euro V emission norms, in tandem with Suzuki Motor Corp which is doing the same with its models in Europe. We will also have common platforms for a host of our models and will not have more than four platforms in the years to come,” said MUL managing director Jagdish Khattar.

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In simple terms Maruti will have a common platform for the Alto, Zen and Wagon R, one for Swift and Esteem, and another for the to-be-launched SX4 which replaces the erstwhile Baleno. There will be another platform for any other product launch, possibly in the premium sedan segment consisting of the Corolla and Civic. The common platforms will help reduce manufacturing cost for the company.

At a time when the industry is earnestly looking at diesel to thwart slackening demand due to rising gasoline prices, the company does not have any plans to bring in any new diesel car just yet. MUL has a full fledged diesel engine plant in Manesar, which has a capacity of 1 lakh engines per annum, but is suffering from supply side constraints on the Swift diesel.

“Diesel has tremendous attractions but we have supply side constraints. We cannot bring in a diesel variant for the Zen or Wagon R because the only diesel engine we produce is the 1.3 litre one that runs the Swift. This engine is not compatible with the Zen or Wagon R which are run on 1.1 litre petrol engines,” Khattar said.

The company used to sell a diesel variant for Zen and Esteem till 2005. It stopped selling the models after its agreement with Peugeot SA of France to import diesel engines expired. Production was also discontinued because upgradation of the engine to meet Bharat Stage III norms turned out to be commercially unviable.

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Instead, Maruti is offering LPG variants to lower costs of running a vehicle and counter competition from diesel variants of rival stables. “We have the Omni LPG at the entry level segment, Wagon R duo in the small car, and Swift diesel in the compact car segment. We have covered the entire segment and our intention is to provide one alternative in each, he said. Arch rival Hyundai is meanwhile slated to roll out a CNG and diesel powered Santro soon.

Capacity at MUL’s diesel engine plant in Manesar will be ramped up to 3 lakh engines by 2010 but not all of it will be for domestic consumption as there will be export obligations to Suzuki . “For the near future we will only have Swift with a diesel variant and all other cars, including the SX4 will be on petrol,” said MUL marketing head Mayank Pareek.