New Delhi: India's largest car maker Maruti Udyog has turned around by posting a net profit of Rs 55 crore over a turnover of Rs 9295.3 crore during 2001-02 which company officials attributed to a mix of aggressive cost- cutting steps and improved quality management systems.

The company had recorded a net loss of Rs 269 crore on revenues of Rs 9219.6 crore in the previous year.

The turnaround has come even as Maruti's car sales have increased marginally by 1.4 per cent year-on-year to 3.4 lakh vehicles from 3.35 lakh units.

During the year, the company had also posted a higher depreciation provision of Rs 347 crore against Rs 322 crore a year ago, the Maruti officials said.

"We have adopted several innovative production practices which improved quality resulting in low manufacturing costs, reduced warranty levels and optimal utilisation of production lines," they said.

Besides, Maruti leveraged on its financial strength and was able to obtain funds at below the Prime Lending Rate (PLR) to meet its short term borrowing needs the officials said, adding, an improved Yen/Rupee exchange rate management also aided the turnaround.

Superior engineering in collaboration with the company's component suppliers brought down the cost of components and materials thereby cutting down production costs, the Maruti officials added.

They said the improved focus on quality has led to a huge jump in the number of defect-free or direct pass vehicles to over 70 per cent from 20 per cent in 2000-01.

PTI