Maruti Contemplates Options To Curb Yen Impact

Maruti Suzuki India revealed that the biggest auto giant is mulling about taking various measures post April to secure its profit after witnessing the variation in Yen. The fluctuation in Japanese currency is being noted after the natural calamity hit the island.

Ajay Seth the Chief Financial Officer at Maruti Suzuki India (MSI) said that for this particular month and for April also the company is secure. But after that if Yen still continues to appraise then Maruti Suzuki has to take measures to curb it.

He also added that the auto giant's margins are influenced greatly when the Japanese currency increases however it is fruitful if it decreases.

Mr Seth stated that after the earthquake and tsunami, Yen is at 81 over the US dollar against 83 yen previously. At present an extremely unstable situation is going as Japanese currency is apprehending to 76 yen compared with the US dollar lately. While the MSI executive did not illuminated as to how MSI will control the Yen variation, as per market experts Yen hedging is a great probability. Mostly Maruti Suzuki India hedges the Japanese currency over euro rather than on rupee to moderate the effect. Maruti imports 25 per cent of its raw material from its parent company Suzuki. In that, around 80 per cent are brought in Japanese currency.

When inquired about the production hamper in MSI due to the natural calamity, Mr Seth mentioned that till next month the Indian auto biggies are secure as there is inventory of the car components. He also stated that other than the stocks in plants, MSI will get few more supplies. As from Japan just before the catastrophe a ship with component sailed from the island. Maruti Suzuki India recently cancelled the jubilee celebration of its 1,00,00,000 th car due to the natural calamity.

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