Maruti-Suzuki undaunted by the FTA with Europe

Maruti-Suzuki chairman is sure that the FTA with Europe won’t make much of a difference to the Indian market.

The Chairman of India’s biggest car manufacturer – Maruti-Suzuki – said that there is nothing to be scared of the Free Trade Agreement (FTA) with Europe. The Indian manufacturers will keep on enjoying the benefits, providing the advantage they have due to localisation of the components.

Commenting on the new developments, Mr. R C Bhargava, Chairman, Maruti Suzuki India Ltd. said, “Contrary to the fears that the Europeans can come and dominate the Indian markets, the FTA can work to India's advantage by way of access to a vast European car market through a duty-free regime. Such a dispensation would push India's car exports to a vast European market. Europeans want lower duties on automobiles. My personal view is: I do not believe it will hurt us one bit. There is nobody in Europe who can compete with Indian manufacturers with high local content.”

This move might not affect the Indian carmakers, but is expected to upset the luxury car segment that does not rely much on localisation of components. This move will also get easy access to Indian carmakers in the European market where they already exist but not much in numbers.

Where Maruti exports almost 10,000 units, Hyundai almost 18,000 a month, a duty-free entry to these markets will give a major boost to these companies, but having said that the price and quality of these carmakers need to level with their European counterparts.

Mr. Bhargava also expressed his faith in the government’s Make in India programme which has the potential to help these companies achieve the milestones in terms of quality and competitiveness.