Indian Express : Declining demand for cars across segments has led the country's largest manufacturer Maruti Suzuki to cut daily output by 25% at its Gurgaon and Manesar plants in Haryana. The company has also cut the production of diesel engines by a third, sources in the know of development said. The latest development comes after the company shut production of its popular Swift and Dzire models at Gurgaon last month.
With the production cut and the suspension of the third shift at the engine plant, Maruti has asked about 200 temporary workers at its Manesar diesel engine plant to go on leave. The company is now making around 2,466 cars a day, down from around 3,300 units a year back.
"The diesel plant was operating at full capacity, but with the slowdown in demand, some adjustment has been made. The workers who have been asked to go on leave are temporary employees," a company spokesperson said.
Maruti has an annual diesel engine capacity of 3 lakh at its Manesar facility, while it gets another 1 lakh diesel engines from Fiat under an agreement. It also has a 13-lakh unit petrol engine capacity at the Gurgaon facility, over 40% of which has been lying under-utilised for the last two years because of a drop in demand for petrol cars. Now, with even diesel car demand taking a hit since January on the back of rising diesel prices, the company has decided to cut diesel engine output as well.
The decision to cut diesel engine output comes even as the company prepares to start operations at a new 1.5 lakh-unit diesel engine plant in Gurgaon later this year, where production is planned to double to 3 lakh by 2014. At full capacity, this will take Maruti's in-house diesel engine capacity to 6 lakh units a year.
The move to substantially cut output both for cars and diesel engines follows large inventory pile-ups since January that had led Maruti to shut both its Manesar and Gurgaon plants for 2-3 days every month. Maruti follows other car makers cutting production, like Toyota Kirloskar and Tata Motors.
In fact, Tata Motors has cut production of the Nano at its Sanand plant by 80%, while other car plants in Pune have seen a 30-40% drop in output earlier this year to adjust to lower demand.
Maruti Suzuki's domestic volumes in June had dipped 8% at 77,002 units, while sales for the first quarter of the fiscal (April-June FY14) had fallen 7% at 2.45 lakh units. On Monday, Maruti shares on the BSE closed down 0.18% at Rs 1,551.65.
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| Maruti Suzuki to cut daily output by 25% |
With the production cut and the suspension of the third shift at the engine plant, Maruti has asked about 200 temporary workers at its Manesar diesel engine plant to go on leave. The company is now making around 2,466 cars a day, down from around 3,300 units a year back.
"The diesel plant was operating at full capacity, but with the slowdown in demand, some adjustment has been made. The workers who have been asked to go on leave are temporary employees," a company spokesperson said.
Maruti has an annual diesel engine capacity of 3 lakh at its Manesar facility, while it gets another 1 lakh diesel engines from Fiat under an agreement. It also has a 13-lakh unit petrol engine capacity at the Gurgaon facility, over 40% of which has been lying under-utilised for the last two years because of a drop in demand for petrol cars. Now, with even diesel car demand taking a hit since January on the back of rising diesel prices, the company has decided to cut diesel engine output as well.
The decision to cut diesel engine output comes even as the company prepares to start operations at a new 1.5 lakh-unit diesel engine plant in Gurgaon later this year, where production is planned to double to 3 lakh by 2014. At full capacity, this will take Maruti's in-house diesel engine capacity to 6 lakh units a year.
The move to substantially cut output both for cars and diesel engines follows large inventory pile-ups since January that had led Maruti to shut both its Manesar and Gurgaon plants for 2-3 days every month. Maruti follows other car makers cutting production, like Toyota Kirloskar and Tata Motors.
In fact, Tata Motors has cut production of the Nano at its Sanand plant by 80%, while other car plants in Pune have seen a 30-40% drop in output earlier this year to adjust to lower demand.
Maruti Suzuki's domestic volumes in June had dipped 8% at 77,002 units, while sales for the first quarter of the fiscal (April-June FY14) had fallen 7% at 2.45 lakh units. On Monday, Maruti shares on the BSE closed down 0.18% at Rs 1,551.65.
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