Maruti Udyog Limited inducted three independent directors and one part-time director on the company’s board in the first week of July.

They are eminent people in their respective fields and will contribute to the quality of corporate management at Maruti Udyog.

The independent directors are: Kumaramangalam Birla, Chairman, A. V. Birla Group; Amal Ganguli, former Chairman, Price Waterhouse Coopers, India; Pallavi Shroff, Senior Partner, Amarchand and Mangaldas and Suresh A. Shroff and Co. In addition, R. C. Bhargava, former Managing Director of Maruti Udyog Limited, has joined the board as a part-time director.

These appointments were approved by the company’s board at a meeting in New Delhi. The meeting was attended, among others, by O. Suzuki, Chairman and CEO, Suzuki Motor Corporation.

The board has also constituted an Audit Committee and a Shareholders-Investors’ Grievances Committee as mandated by the stock exchanges.

Maruti Udyog achieved a 50 per cent growth in sales in June 2003. It sold 35,780 units during the month. This included export of 6,682 passenger cars, the highest ever export by the company. Following the strong performance in June this year, Maruti’s domestic sales in the first quarter of the current fiscal (April-June 2003) touched 90,698 units. This is 37 per cent higher than in April-June 2002. The company’s sales have been growing continuously for the past nine months.

Growth in June 2003 has taken place across all models and segments. Sales of Maruti 800 touched 13,126 units in June 2003. This is 56 per cent higher than in June 2002. With this, the total sales of Maruti 800 in the first quarter (April-June 2003) were 40,777 units. This is 63 per cent higher than in the same period last year.

The highlight of the first quarter of this fiscal (April-June 2003) has been the strong performance by Maruti’s three premium compact cars. The Alto sold 2,452 units in June 2003, 33 per cent higher than in June 2002. For April-June 2003, sales of the Alto touched 8,143 units, 46 per cent higher than April-June 2002.

The WagonR sold 2,978 units in June 2003, 22 per cent higher than in June 2002. Following this, its sale in April-June 2003 touched 10,512 units, 64 per cent higher than in the same period last year. Sales of the Zen touched 14,239 units in April-June 2003. In June 2003, its sales stood at 4,909 units, four per cent higher than in June 2002.

With the record exports in June 2003, Maruti’s total exports in the first quarter (April-June 2003) touched 12,496 units. This is 254 per cent higher than April-June 2002.

Meanwhile, Jagdish Khattar, Managing Director, Maruti Udyog Limited said: "In Maruti, we are always conscious of our special place in India. But this response has exceeded my expectations.

"The Maruti public issue was seen as a symbol of India’s economic reform programme. By investing in this company, investors have shown their faith in the reform programme."

Passenger car sales have set a scorching pace this summer. The first quarter that ended on June 30 saw a 28 per cent growth in sales volume; the highest since the first quarter of 1999-2000 when the industry ran up a sales growth of 30 per cent. In sheer volume terms, the 1.93 lakh cars and utility vehicles sold in the April-June period ranks as the highest in the last eight quarters.

The sharp rise in volume in recent times has car manufacturers salivating as they foresee at least a double-digit growth rate for 2003-04, if not one in the high teens. Even as car manufacturers are busy hatching plans to capitalise on the anticipated uptrend, it may be interesting to look at historical data to project the likely growth for the current fiscal year.

An analysis of the last six years since 1997-98 shows that the average contribution of the first quarter to total annual sales volume is about 22.8 per cent.

In other words, the total annual sales volume of passenger cars and utility vehicles has, on an average, been about 4.39 times the volume registered in the first quarter. Going by that measure, 2003-04 should see sales volume of about 8.47 lakh vehicles. That would be a growth rate of 19.7 per cent compared to 2002-03.

Now, arithmetic aside, is this an attainable number from a practical, market viewpoint? There are many who think that this may be too optimistic an assessment.

A more reasonable assumption, according to them, would be a growth of 10-12 per cent for the whole year. This means that sales have to slow down considerably in the remaining nine months of this fiscal year as the industry has already run up a 28 per cent growth in the first quarter.

Yet, looking at the current state of the market and the overall economic environment, it will not be surprising if passenger car sales end up with a growth rate in the mid-to high teens this fiscal. Just look at the factors supporting this premise.

By most indications, we seem to be enjoying a fairly good monsoon that should see agricultural activity picking up with its obvious favourable impact on the other sectors of the economy. The impact of a good monsoon on overall economic sentiment cannot be underestimated.

Second, look at the way car manufacturers are flooding the market with new models and variants.

In the last three months, Hyundai re-launched the Santro (Xing), and General Motors came up with two new models—Corsa Sail and the Chevrolet Optra.

General Motors looks set to launch at least two more models before the year runs out and if market gossip is to be believed, one of them could be the Daewoo Matiz on its comeback trail albeit under a different brand name. Ford India has, for its part, come up with yet another variant of the Ikon, the NXT Sxi. Meanwhile, Tata Engineering is scheduled to launch an estate version of the Indica even as it continues to push volume in the Indigo, which is already the top-selling model in the C segment.

Experience shows that the market has expanded to accommodate new models, especially in the mass-market category. The year 1999-2000 is a good example. That was the year Indica entered the market and, together with the Matiz and the Santro, expanded volume to record levels.

And then, there is the re-invigorated Maruti Udyog flooring the pedal in its best-selling model, the 800.