New Delhi, Nov 21: India’s largest car maker, Maruti Suzuki has reduced its capital expenditure guidance for the fiscal year to Rs 4,000 crore, a 12.5 percent reduction compared to its earlier estimate of Rs 4,500 crore.
Speaking to analysts, Ajay Seth, Chief Financial Officer, Maruti Suzuki India said, “Our guidance for the full year remains at about Rs 4,000 crore and there are certain items that will get incurred now in the second half; there was a full plan that was discussed in the board meeting, guidance remains at Rs 4000 crore.”
While the capital expenditure for the second quarter ended September 30 stood at Rs 1,458 crore, the company has not provided any cause for reduction in its guidance. A capital expenditure of around Rs 900 crore was incurred in the first quarter ended June 30.
At the end of the first quarter Seth had said, “We have a capex of about Rs 4500 crore (for the full year). This will be on various new models and on R&D and other infrastructure relating to marketing.”
Last year the company had incurred a capital expenditure of Rs 3200 crore. Apart from spending on its regular business plans involving product development and marketing, the maker of Alto and Dzire has started investing heavily in buying land parcels for future network expansion.
“To de-risk its future network expansion, the company has been identifying land in prominent as well as upcoming locations for expansion of sales and service outlets. A separate function has been set up for buying strategic land parcels across the country.”