The Economic Times of India reports that Maruti Udyog is planning to improve its productivity by 50% by 2005 as part of plans to gear up to tackle increasing competition head-on. It also hopes to reduce costs by 30%.

Beyond India, it wants to establish its plant as a supplier of small cars to the global market in association with Suzuki.

According to the newpaper report, Maruti is not alone in this "productivity improvement and cost cutting" mission and is taking along its 350 vendors and even the dealers to aggressively push itself forward in the Indian market.

"The focus earlier was how many vehicles we made out of available manpower. Now, it is how many man-hours are required to make a vehicle," Y Nakamura, joint managing director, MUL told visiting journalists from Chennai. It takes 24 man-hours to make a vehicle now, which the company wants to reduce to 12 in three years.

The objective is to reduce production cost and pass on the benefits to the customers, Nakamura said, recalling the recent price reduction of Maruti 800 model.