Maruti Suzuki to counter Yen fluctuation

The Tsunami and Earthquake in Japan has affected many companies. India’s largest car maker, Maruti Suzuki, a subsidiary of Japan based auto-maker- Suzuki, plans on taking necessary steps to protect its margins. The fluctuation of Japanese Yen after the recent mishap in Japan, is the main reason that has prompted the company to take such a dramatic step, explained Maruti Suzuki India (MSI) Chief Financial Officer Ajay Seth.

Presently, the Japanese currency is quoted at 81 against one U.S Dollar, and the company plans on countering the Yen fluctuation via currency hedging.
Procurement of raw materials is done from Japan, and is purchased in Yen. Yen fluctuation would not impact MSI till the end of next month because the company has enough inventories for production, but Yen fluctuation might come into play once importing of raw materials begin once the current batch is used.

MSI shares went up by 3.42 per cent from its previous close, and now read 1,170.05 on the Bombay Stock Exchange.