Maruti may hike production of diesel vehicles at Gurgaon

Grappling with labour woes at its Manesar unit, Maruti Suzuki India is considering hiking production of diesel vehicles at its Gurgaon plant. Sources told CNBC-TV18 the plan is to try and reduce the waiting period on Ritz, Eritiga and Eeco range of four-wheelers.

The auto major is reviewing the market demand for Ritz and other diesel vehicles in produced at Gurgaon, in the backdrop of severe supply woes and a slump in market share and sales as a lockout at the key Manesar car factory enters its second week, threatening a replay of a dismal 2011 when labour unrest battered volumes and profit.

The shutdown of the factory, which suppliers and analysts expect to last at least a month at a daily cost of USD 15 million in lost production, is likely to hobble operations for months to come, hampering the carmaker's performance in India's key October sales rush for a second straight year.

Maruti's share of the passenger car market fell 8 percentage points to 40% by the time the strikes ended. That had recovered to 44% in the April-June period of this year, but a similar slide looms.

Meanwhile, the Gurgaon plant has a capacity for ramp-up of diesel car production. Sources say the Eritiga production was impacted due to short supply of key components. Ertiga has a waiting period of six-seven months.

Maruti is in touch with concerns vendors to increase production. Currently, Maruti produces around 400 units a day of Ertiga and around 300 units a day of Ritz and Eeco cars.

Sources say the company will give new projections for Ritz in the coming weeks.

Shares of Maruti Suzuki have plunged more than 9% since it announced the shutdown of its Manesar plant on July 18, however, they have more than decent return of over 20% this year.

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