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Maruti plans accessories foray

BS Corporate Bureau

Maruti Udyog is planning to extend its vertical integration in the auto industry by foraying into the auto accessories business. Jagdish Khattar, managing director of Maruti Udyog, said the company was looking at the business quite seriously, but did not mention a specific time-frame for entering the new business.

"We are taking up the issue of entering the accessories business quite seriously. We currently have around 350 accessories in our catalogue and want to leapfrog into the accessories market," Khattar said.

The accessories segment is the fifth venture being eyed by Maruti, India's largest auto manufacturer, outside the manufacture of automobiles which is Maruti's core business. This is part of the company's strategy to extend its involvement with customers during the entire life-cycle of their ownership of Maruti cars.

Maruti has so far made forays into leasing and fleet management, auto finance (Maruti Finance) and pre-owned cars (Maruti True Value). Its plans to get into the vehicle insurance have been temporarily "delayed due to lack of proper legislation". The company has budgeted Rs 160 million this fiscal towards these four businesses.

Having opened Maruti True Value dealerships in Bangalore and New Delhi, the company on Wednesday opened two more dealerships in Mumbai, and is planning to open seven more outlets shortly across the country.

Initially, Maruti will sell only its own cars at these pre-owned car dealerships, as it still does not have enough experience in this field. However, the company intends to sell other car brands as well, once its personnel gain enough experience, according to G C Dwivedi, general manager, Maruti, and in-charge of the business.

Dwivedi said Maruti engineers will purchase cars by evaluating their worth against a 126-point checklist. The cars will then be refurbished and sold back to customers as used cars at about a 5-6 per cent premium over their market worth.

The premium charged is for the comfort-level provided to a customer by Maruti, company officials said. Maruti will certify the car, in addition to providing customers with a history of its ownership and a record of its accidents. Maruti will only purchase cars that are less than four years old and will provide a warranty for one year or 15,000 km, whichever is less.

Initially, used cars sourced from a particular state will be sold in the same state. Once value-added tax comes into force, cars bought from one state would also be sold at other places, the officials said.

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