Analysts have opined that a foray into Africa, where there is high demand for small, inexpensive cars, is a good move for the likes of Maruti Suzuki.
Maruti is evaluating the suitability of different African markets for an assembly plant, managing director Kenichi Ayukawa told reporters on Tuesday, adding that the study is in its early stages.
Exports to African countries including Algeria, Egypt and South Africa made up about 8 percent of Maruti’s exports of 123,897 vehicles in the year to March 31. Maruti would need to sell more than 50,000 vehicles a year in Africa to justify setting up an assembly plant, Ayukawa said.
Increased revenue from overseas markets would not go amiss for Maruti, which is owned by Japan’s Suzuki Motor Corp. Its exports grew 2 percent in the past financial year, against domestic sales up 11.5 percent.
Maruti expects the current financial year, which runs to the end of March 2017, to be tough on many counts, with foreign exchange looking even less favourable and commodity prices rising in India, Chairman R C Bhargava said after the company posted an 11.7 percent fall in fourth-quarter net profit.
