Maruti to pay Suzuki in Rupees

To Insulate from forex fluctuation company has decided to take the step
New Delhi: The country’s largest car maker Maruti Suzuki India will pay royalty on its future models to parent Suzuki Motor Corp in Indian rupees instead of Japanese yen to insulate from forex fluctuations.
Addressing shareholders at its annual general meeting, Maruti Suzuki India (MSI) chairman R.C. Bhargava said in order that the company is “not exposed to the variation in theexchange rate which has been happening in the past,” royalty to Suzuki for all future models will be in Indian rupees instead of yen on the current models.
He did not specify what the future models would be but according to company officials it could be those upcoming products on which Maruti is yet to sign a technical agreement with the parent.
Mr Bhargava said with the company enhancing its research and development capabilities and playing greater role in joint product development with Suzuki, the royalty payout will also decrease. “More and more R&D work will be done in India and royalty calculation will be based on work done here and our expenditures on R&D will be rewarded in the form of reduced royalty,” he added.
( Source : PTI )
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