Maruti to reduce forex exposure by 65 %

With adverse currency movements affecting margins, car market leader Maruti Suzuki India announced on Monday that it is targeting to reduce its forex exposure by nearly 65 per cent to USD 600 million by March 2015 for which it is working with its vendors to reduce imports.

Besides, the company is looking out for new markets to increase exports of its products to mitigate impact of unfavourable foreign exchange fluctuations.

'The adverse currency movements are affecting us. We are trying to reduce our net forex exposure to USD 0.6 billion by 2014-15 fiscal from about USD 1.7 billion at present,' Maruti Suzuki India (MSI) chief financial officer Ajay Seth said.

The company's current foreign currency exposure, along with its vendors, due to import is USD 2.5 billion, he added. 'We have identified 14-15 vendors, whose import content is very high, and requested them to reduce it. We are also providing them all helps in more localisation of their products. Our target is to bring down the import content to USD 1.8 billion in the next three years,' Seth said. On the export front, the company's exposure at present is around USD 800 million. 'We are constantly looking at newer markets for expanding our exports. We are aiming to increase our exports to USD 1.2 billion by 2014-15,' Seth said.

Hit by rupee depreciation and higher overall expenses, MSI had reported 22.84 per cent decline in its net profit for the quarter ended 30 June this year.