Maruti Suzuki Gets Touchy

Cammy Corrigan
by Cammy Corrigan

Last November, Suzuki received a fuel leakage complaint on three cars in Europe and one in India. Suzuki did what Suzuki was required to do: Send owners of the “A-Star” (A.K.A, Suzuki Alto, Nissan Pixo) an invitation to go to their dealer and have the fuel pump fixed. As usual, this story received next to no media attention. In the years BT (before Toyota,) who cared about a yet another recall?

That was then, this is AT. Today, someone said “Suzuki has a recall” on the floor of the New Delhi stock exchange. Holy cow!

The Maruti Suzuki stock dropped like a rock. Traders that found themselves on the wrong side of the deal complained immediately that the stock exchange should have been notified much earlier about such a significant development. Sound familiar? Miffed Maruti Suzki issued a statement clarifying that it had “no intention” of trying to hush up the affair. They claim that the reason they didn’t go public was that India doesn’t have a framework for recalls. Now that’s an interesting piece of information if you drive in India.

The Times of India reports that Maruti Suzuki didn’t inform the stock market regulator, Sebi, because they believed that the amount required to spend on the recall process would not have much impact on the company’s financials and wouldn’t impact on profitability.

Maruti Suzuki chairman R C Bhargava said “We are supposed to inform only if there is any significant amount involved.”

And because Bertel was slammed yesterday for making a calculation mistake behind the decimal point, I won’t fall into that trap and leave the conversion of Rupees and Indian numbering systems as an exercise to the dear reader (with a little help from Wikipedia.) Said R C Bhargava : “The upper limit for Maruti is around Rs 12 crore which is not large when we read it in relation to the company’s annual PBT amount of Rs 3000 crore. The amount is less than 0.4 percent of our PBT and would not make no difference to our price-to-earnings ratio.” All still with us?

After the money part was (hopefully) settled, Bhargava blasted his critics. Three cars in Europe and one in India, “and this out of the 70,000 units we sold in Europe and about 30,000 units in India. As a responsible company we decided to recall all the cars. We took special care to ensure the problem does not come across on any other car anywhere.”

Car companies can get really touchy about recalls these days. I wonder why?

Cammy Corrigan
Cammy Corrigan

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  • Drifter Drifter on Mar 01, 2010
    Clearly a government plot designed to favor Tata over the foreign competition, no? This argument would hold water if Indian govt. hadn't owned 49% of Maruthi. Would NHTSA favor Ford over GM? Ignorance=Bliss.
  • Porschespeed Porschespeed on Mar 01, 2010

    Anyone want to take bets that the person who yelled on the floor of the exchange was an employee of someone who held a very large short position?

  • FreedMike Off topic, but folks, this site is not working well for me from a technical standpoint, and it doesn't matter if I'm using my phone, or my computer (on two different browsers). It locks up and makes it impossible to type anything in after a certain point. Anyone else having these issues?
  • Syke Kinda liked the '57, hated the '58. Then again, I hated the entire '58 GM line except for the Chevrolet. Which I liked better than the '57's. Still remember dad's '58 Impala hardtop, in the silver blue that was used as the main advertising color.
  • Dartdude The bottom line is that in the new America coming the elites don't want you and me to own cars. They are going to make building cars so expensive that the will only be for the very rich and connected. You will eat bugs and ride the bus and live in a 500sq-ft. apartment and like it. HUD wants to quit giving federal for any development for single family homes and don't be surprised that FHA aren't going to give loans for single family homes in the very near future.
  • Ravenuer The rear view of the Eldo coupe makes it look fat!
  • FreedMike This is before Cadillac styling went full scale nutty...and not particularly attractive, in my opinion.
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