Maruti Suzuki is gearing up to tackle its yen exposure and the key to that strategy is ramping up exports. CNBC-TV18's Ronojoy Banerjee reports how the auto major is planning to implement that strategy.
This move really has to be seen in the context of the company's efforts in the recent past to reduce the imports that they have. This is largely an effort to reduce the yen exposure. At the same time the company has also been working and speaking to various people within the company at ways in which to increase the exports.
One way in which they have been over the last few months is to concentrate more on the non-European markets. This is because exports of the European markets have been badly hit due to the scrappage scheme that was a big source for export for many of the Indian manufacturers that has been withdrawn.
Company officials also say that Maruti is looking now at increasing the exports of the large components or the completely knocked-down (CKD) kits mainly to the manufacturing units of the parent Suzuki.
Now to a lesser extent, this has already started because with the Ertiga. The company has now started exporting CKD kits for the Swift as well, which is going to be assembled in the Thailand factory. The company is in talks with their parent to really increase the exports of such components and maybe look at assembling some of the vehicles as well.
The export target this year is the same as last year. The company is hoping that through this new move it will be able to double the exports revenues over the next 3-4 years. At present it is about 8 percent. It also hopes to achieve 15 percent of net sales by roughly about 2015-2016.