Prime Minister Modi, in his Independence day speech yesterday, talked about his dream to see ‘Made in India’ products around the world. His message to the manufacturing sector stressed on making defect free, high quality, world class products locally, so that the population reduces its dependence on imports. Maruti is already walking on that path and expects to pay lesser royalty to the parent Suzuki Motor Corp, as a result of joint-development of products. The upcoming Maruti Compact SUV is one such example, for which Maruti expects to pay a lower rate of royalty.
Ajay Seth, Chief Financial Officer, Maruti Suzuki India said, “In any situation where we have joint development for any product by using the engineers, who work on development of the products in India and Japan, there will be an equal apportionment based on the efforts and technology leveraged by either side on calculating royalty. You will see this happening with the first launch of our compact SUV, as and when it comes, because that is the first case of joint development and therefore when that comes in you will see that rate of royalty will be lower then the normal rate of quality based on the efforts which are being jointly put.”
He further added, “In terms of vehicle models, yes, the next few months we have powerful lineup, we are entering the SUV and MUV segment with full bandwidth.”
The leading car maker in India has already invested heavily in creating a test-track and an R&D facility at Rohtak, Haryana, which should be operational by November 2014.
Source: ET