Maruti asks vendors to cut input costs, have own R&D

Maruti asks vendors to cut input costs, have own R&D

New Delhi: With the domestic automart showing signs of correction, the country’s largest car maker Maruti Suzuki India (MSI) is looking at strengthening its back-end operations by asking vendors to increase efficiency, besides building their own research and development capabilities.

The company is also in the process of setting up its own India-specific R&D centre and is aiming to design independent full bodies of different models.

“We are now extending our scope of activity to ensure that tier-2 vendors also adopt modern systems, which will increase productivity and reduce costs," Maruti Suzuki India chairman R C Bhargava said in its Annual Report for 2008-09.

The company’s thrust to increase quality and efficiency would benefit the small and mini scale industries, he added.

To cut input costs, MSI has introduced — One Component One Gram initiative, in which the weight of every component is reduced by a single gram, the report pointed out.

Bhargava said the company is also in the process of acquiring land to set up an India-specific R&D centre to design and develop small cars.

“At the same time, we are persuading our suppliers to establish their own engineering capabilities to design and test products, as otherwise our own efforts cannot be fully successful," he said, adding MSI would also support the vendors in this regard to the extent necessary.

The report further said MSI is targeting to develop independent full body design capability.

On its future R&D strategy, MSI managing director S Nakanishi said: “Suzuki will continue providing technology to Maruti for global platforms. Indian engineers will focus on the Indian market and come out with India-specific models apart from bringing customised versions of global models to India."

The Indian engineers would also develop new models on existing platforms and powertrains with alternate fuel technologies, he added.

Besides, to facilitate exports, the company has commissioned a dedicated car terminal at Mundra port. It was developed in association with Mundra Port and Special Economic Zone Ltd at an initial investment of Rs100 crore, in which MSI contributed 40%.

“We are also working on a direct railway link from our Manesar assembly line to this terminal," Nakanishi said.

The report also said MSI has jointly developed with Indian Railways special auto wagons for “a high capacity, high speed and safe car transportation system".

The company, which exported 70,023 units in the last fiscal, is targeting to cross one lakh mark in overseas sales during the ongoing financial year. It exports A-Star, Swift, Alto and M-800 among other models in over 100 countries across the world.