Financial Daily from THE HINDU group of publications
Tuesday, Jul 13, 2004
Marketing - Trends
Maruti's used car, insurance businesses see robust growth
New Delhi , July 12
IT is not only sales of passenger vehicles that are rolling in the moolah for automobile major Maruti Udyog Ltd. The company's other businesses such as the True Value pre-owned cars business and even car insurance have been seeing a triple digit growth rate.
In the insurance segment, Maruti, through its two wholly-owned subsidiaries Maruti Insurance Brokers Ltd (MIBL) and Maruti Insurance Distribution Services Ltd. (MIDSL), issued over 4,50,000 policies in the last fiscal year, registering a growth of more than 174 per cent.
As per Maruti's annual report, the total income of MIBL increased to Rs 42.95 crore last fiscal from Rs 17.27 crore in the previous one.
Similarly, the pre-owned car business under the brand name `True Value' expanded to reach 140 outlets in 102 cities last year, as compared to 50 outlets in 34 cities in 2002-03. The business sold 14,005 pre-owned cars and 10,700 new cars under the exchange route last year.
True Value Solution Ltd saw an increase in total income last year to Rs 1.59 crore, though there was a dip in profit due to increased expenditure on manpower.
Maruti's corporate leasing and fleet management business under the brand name N2N meanwhile signed up 16 new clients last year taking the cumulative number of deals signed to 30.
According to the company's annual report, with more companies including public sector companies actively "looking at this mode of employee car acquisition and management, we expect healthy growth in this business in the future."
Meanwhile, the company's `Maruti Finance' business disbursed car loans amounting to Rs 2,700 crore to over 1,30,000 customers last year.
The company had entered into a tie-up with the State Bank of India (SBI) under the brand name `SBI-Maruti Finance' in February 2003, which was subsequently extended to all SBI associate banks last year. Over 44,000 vehicles were financed under this tie-up with SBI and their associate banks in 2003-04.
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