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India in talks with Suzuki for stake sale in Maruti

The Indian government has begun talks to sell its stake in the country's largest carmaker, Maruti Udyog Ltd, to its joint venture partner, Japanese auto firm Suzuki Motor Co, a senior official said on Monday.

"Yes, we are in the process of talking to Suzuki. Some discussion has taken place," divestment secretary Pradip Baijal told reporters on the sidelines of a financial seminar.

He said the Japanese firm had not clearly stated whether it planned to buy out the government's nearly 50 per cent equity in Maruti, an equal venture of the Indian government and Suzuki.

"I wish it was so simple. You know that the issue is so complex," the official said. Earlier this month, India's federal cabinet set up a panel of top officials to suggest ways of divesting its stake in Maruti.

Among the potential suitors are U.S. car firm General Motors Co, which plans to double its equity in Suzuki to 20 per cent and Indian scooter and motorbike maker Bajaj Auto Ltd, which says it is prepared to talk to Suzuki if the Japanese firm wants it as a partner.

Any buyer must receive Suzuki's consent.

"We haven't reached that stage yet (where we could consider Indian firms buying stake)," Baijal said.

Maruti Udyog Ltd has dominated India's car market for more than 15 years with its small, attractively priced, fuel-efficient cars.

Even though its market share has slipped from nearly 80 per cent two years ago to 54 per cent in April-October 2000, it remains an attractive buy for any automobile firm, analysts say.

The firm sold 186,995 cars in April-October 2000.

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