Maruti Suzuki to stop exporting cars to Europe for 15 months

Maruti Suzuki India Limited will halt its exports to Europe for at least one year, starting in the quarter April-June. The company is likely to restart exports to the continent in September 2015. This 15 month gap will mean a drop of 10% in the company's total exports for the next fiscal.

Maruti's exports to Europe will cease after the company ships out its last consignment of 15,000 A-Star hatchbacks in the next quarter. The A-Star has been the only model to be exported to Europe for the last few years. The production of the car has been stopped in India. Its replacement, the Celerio, will be shipped to Europe from Suzuki's Thailand plant. The reason behind sourcing the car from Thailand is that the Thai-built Celerio is a Euro-5 compliant model, while the Indian-built version complies only with Euro-4 standards.

Approximately 1.2 lakh cars are exported worldwide by Maruti annually, out of which, Europe accounts of about 30%. In FY 2013, the company had shipped about 24,000 units to the continent. In FY 2014, this number has risen to 30,000 units. While the halt of shipments to Europe will hit the company's overall exports, Maruti expects to soften the impact by increasing its exports to other markets like South East Asia, South America and Africa. When the company resumes its exports to Europe, it will do so with a new model, probably the YRA premium hatchback.

Maruti has been exporting cars to 125 countries worldwide. The company is gradually shifting its focus from Europe to emerging markets.

Source: Financial Express