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Maruti top brass, govt seek to steer clear of panic: car cost may rise

Senior officials from Maruti Udyog Limited including Managing Director R S S L N Bhaskarudu today held high-level meetings with top functionaries in the ministries of industry and environment seeking immediate intervention to resolve the crisis arising out of the recent Supreme Court directive on emission norms.

Meanwhile, the company officials are also planning to fit imported engine management system kits to the existing vehicles to make them Euro-II compliant, which would result in around Rs 30,000 hike in production costs per unit.

As a result, vehicles are likely to be dearer by nearly Rs 30,000 per unit in the National Capital Region in case the company decides to pass on the extra cost to the consumers.

''The kits are presently being fit only on the cars which are being exported from India. In order to meet the July 1, 1999 time table set by the apex court, we will have to fit these kits on to the vehicles being sold in the domestic market, particularly in the NCR. This would result in a cost hike of about $ 600-700 per unit,'' company sources said.

However, the sources pointed out that a final decision is yet to be taken on whether the entire cost hike would be passed on to the consumer.

Besides, it is also yet to be decided whether the imported kits would be fit on all vehicles or only those being sold in the NCR. ''Logically, we would be doing it only for the NCR region cars, but a decision is yet to be taken.''

The technology, the sources added, is available with the company.

It may be recalled that Bhaskarudu had earlier expressed fears that the Supreme Court order reducing the number of cars sold within the NCR would create myriad problems and possibility of trans-migration of cars sold in other areas.

Although the company is still in the process of assessing the situation, he had stated that it is also considering various options in respect of the judgement.

Expressing surprise at the apex court's judgement, he further admitted that though the company was planning to make all its vehicles both Euro-1 and Euro-2 compliant by April 1, 2000. Advancement of the effective date of Euro-1 norms to July 1, 1999 has ''created a situation where we are somewhat pressed for time''. ''In that context, we are looking at all our options to ensure that we carry out our business as usual.''

The company, he said, has already made an investment of over Rs 6 billion to gear its production to the manufacture of cars that meet the Euro emission norms by April 1, 2000.

Maruti was confident that it has both the technology and the ability to meet the Euro-II emission norms. He pointed out that it was not a technological issue ''since Maruti has the technology at its disposal anyway and was exporting cars to Europe to meet these and other stringent norms''.

''It is more a question of time availability. Specifically, it is a question of logistics and access to manufacture and supplies of components to meet the new schedule,'' Bhaskarudu said.

Stating that the company was stil assessing the situation, he said, a full picture would emerge once the written orders are available in the next few days.

Once the company has assessed the full implications of the judgement, it will prepare plans and look at various options. This will help it to meet the requirements of all customers, including those awaiting delivery of cars.

Over 10,000 people are currently on the waiting list in the NCR and an even larger number are aspiring to buy the cars.

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