MARUTI GEARS UP TO DEFEND 50% MKT SHARE

CAR CZAR PLANS BIG CAPEX TO HIKE OUTPUT BY 50-75% MARUTI Suzuki plans to increase its production capacity by up to 75% over the next five years in a bid to hold on to its 50% market share in the country's lucrative passenger car market.      "Depending on how the car market performs, we would like to reach 1.5–1.75 million units a year by 2015," said Mr Shinzo Nakanishi, MD of India's largest carmaker.      "That should help us keep the 50% share of the market we now have because the total car industry will, by then, be around three million units strong," he told ET.      Maruti will have a capacity to build one million cars by the end of this fiscal year when its second plant in Manesar is ready.      Mr Nakanishi said the board of Suzuki Motor, the Japanese parent of Maruti, will decide on the investment in January. The company will require an investment of at least Rs 3,000-4,000 crore to add 5-7 lakh additional units, said a Mumbai-based auto analyst who requested not to be named.      This will be the biggest capital expenditure by Maruti Suzuki since its Rs 9,000-crore investment announced in 2006.      Te capacity addition will be in phases. Maruti Suzuki has 600 acre in its Manesar complex, of which two-thirds is still free. "So we can make two plants there producing an additional 600,000 cars in Manesar itself," Mr Nakanishi said.      The company has drawn up ambitious plans to defend its market share in the face of increasing competition in the country's redhot small car market, which accounts for close to 80% of all passenger vehicles sold here and is dominated by Maruti.      It's already under attack from Tata Nano, the world's cheapest car, that hit the market earlier this year.      Also, India has become one of the most sought-after car markets with companies such as Toyota, Honda, Volkswagen and Ford set to roll out entry-level compact cars over the next couple of years.      But Maruti, founded by Suzuki and the Indian government back in 1982, mostly held on to its market share in recent years by launching a flurry of highly competitive products and making big inroads into the rural and semi-urban markets.      During April-November, for example, Maruti saw its sales jump nearly 30% to 6,46,139 cars including exports.      In fact, Maruti's top-gear capex plans tie in with some aggressive export targets. The company is eyeing exports of about 140,000 cars this year including one lakh A-Star hatchbacks, said Mr Nakanishi.      With the scrappage schemes in Europe that offer huge discounts to car buyers who exchange their old vehicles ending next year, Suzuki is looking at non-European markets such as Australia, South America Middle East and South East Asia including Thailand and Malaysia, he said. "Our target is to do around 150,000-200,000 units in exports including Nissan next year."      Suzuki has signed a contract production agreement with Nissan to build 50,000 AStar cars for Nissan to be sold in Europe as Nissan Pixo. According to Mr Nakanishi, although such arrangements are good business because of the additional volumes they bring in, they can also be "dangerous if the OEM partner decides to develop its own model".      So the thinking in Suzuki Motor Corp right now is that the OEM supplies like the Nissan deal should not exceed 100,000-150,000 units a year.      Maruti currently has two plants –at Gurgaon and Manesar in Haryana. It is building a second plant in Manesar with 300,000 unita-year capacity. It has also recently invested around Rs 130 crore to increase the Gurgaon plant capacity by 80,000-90,000 units to nearly eight lakh cars a year.      Currently Gurgaon makes some top selling models like the Alto, M800, Ritz and petrol Swift. Models like the Dzire, A-Star, SX4 and others are made in the Manesar plant. Mr Nakanishi said the company is also studying various combinations of moving some models between Gurgaon and Manesar plants.      "For example moving Ritz diesel production to Manesar will help since the diesel powertrain is made in Manesar. Similarly moving the WagonR to Manesar may benefit," he said.  MEN ARE BACK 3m units Estimated size of car industry by 2015  6,46,139  cars sold by Maruti in April-November this year  Rs 9,000 cr  Investment by Maruti in 2006 to hike production capacity to 1 million units a year  Suzuki has inked production deal with Nissan under which Maruti would make 50,000 A-Star cars for Nissan to be sold in Europe as the Nissan Pixo  Gurgaon plant of Maruti makes some top selling models like the Alto, M800, Ritz and petrol Swift.  Models like the Dzire, A-Star, SX4 and others are made in the Manesar plant. It is building a second plant in Manesar with 300,000 unit a year capacity. It recently invested around Rs 130 crore to increase the Gurgaon plant capacity by 80,000-90,000 units