Khattar retires from Maruti Suzuki; top management reshuffled

In an official press release, Maruti Udyog, now Maruti Suzuki (as per a change in name which took place last month), has announced the retirement of Jagdish Khattar, managing director, Maruti Suzuki India Ltd (MSIL). The company has also announced a strategic restructuring of its top management.

In keeping with company norms, Khattar, who has been with MSIL for 14 years, will retire on December 18, 2007, when he turns 65. S Nakanishi, currently chairman, MSIL, and senior managing executive officer, Suzuki Motor Corporation (SMC), will succeed Khattar as managing director.

In 1999, he was promoted to joint managing director. In the same year, there were disagreements between Suzuki Motor Corporation (SMC) and the Indian government, which then held a 50 per cent stake in the company. Both partners agreed to appoint their nominee as CEO and MD of Maruti for a three-year term, following which Khattar was appointed to the post as a government nominee.

In 2002, when it was SMC’s turn to appoint an MD, it renamed Khattar as its nominee. His second term as MD began in May 2002 and was supposed to last till he turned 65 or the end of 2007, whichever was earlier.

In line with the restructuring, RC Bhargava, who currently holds the designation of director at MSIL, will assume responsibility as chairman. T Kobayashi, senior managing director, and M Osada, director, R&D, MSIL, will leave as board members with effect from December 31, 2007. Kobayashi will be replaced by T Ohashi, currently executive director of MSIL, on the board and put in charge of production. T Hasuike, currently managing executive officer, SMC, will replace Osada on the board and look after product planning and technical divisions.

Suzuki increased its stake in Maruti Udyog from 26 per cent to 40 per cent in 1987 and further to 50 per cent in 1992. Maruti Udyog came out with an IPO on May 2, 2003, following which, the government’s stake was reduced to 20.8 per cent; SMC’s equity increased to 54.2 per cent. On February 15, 2006, the government stake reduced to 18.28 per cent and the SMC stake increased to 54.21 per cent. On May 10, 2007, the government sold its complete stake to financial institutions. Currently, 71.06 per cent of the equity is held by foreign investors, including SMC.

Maruti Suzuki, one of India's largest four wheeler manufacturer, has registered a total income of Rs 47,358 million (net of excise) during the second quarter (Q2) of the fiscal (July-September 2007), a growth of 33.7 percent over the same period last year. The company’s domestic sales during Q2 (July–Sept 2007) grew 17.8 percent over the same period last fiscal.