Guwahati, Assam/India-24 March 2020: A person showing a car key of Maruti Suzuki with logo isolated on orange background wall. Editorial credit: SANJAY KUMAR SARMAH / Shutterstock.com
The nine-day production shutdown starting May 1 announced by Maruti Suzuki, is set to hit delivery schedules and increase the waiting period for its cars.
The Delhi-based car market leader was already working on a lean stock at the start of April, which was nearly 40 percent below the ideal levels, a top company executive told analysts.
“The network stock at the beginning of the month (April) was around 32,000 and currently it is about 85,000-90,000. These are less than the normal stock which should be 135,000-140,000. The current pending bookings we have are just above 200,000”, said Shashank Srivastava, executive director, Maruti Suzuki India (MSIL).
Maruti Suzuki will keep its Haryana-based plants shut between May 1 and May 9 for maintenance purposes.
This shutdown, which is partially triggered to divert the industrial oxygen consumer by the plants for medical needs, was to be originally carried out in June.
“There has been a lockdown in nine states including Maharashtra, Delhi, Chhattisgarh, Jharkhand, Rajasthan and Karnataka and they constitute roughly 35 percent of the monthly sales. In that sense the retails might be a little affected”, Srivastava added.
A mail sent to MSIL seeking a reaction on the possibility of the waiting period getting extended due to the shutdown, remained unanswered at the time of publishing the article.
The maker of Swift and Baleno, typically, sells 165,000 units a month of which 13-15 percent is either exported or given to Toyota as original equipment manufacturer (OEM) sales. Maruti Suzuki is constrained by capacity and therefore sells only about 145,000 units a month in India.
The company has been operating its plants at full capacity since the past many months following a consistent surge in demand. Several of its models like Dzire, Ertiga, Baleno and Brezza have been on waiting period extending up to three months.
It was only in the first week of April that the Gujarat plant, owned and run by MSIL’s parent Suzuki Motor Corporation, saw an additional capacity of 250,000 units a year come on board. However, the Gujarat plant will also halt operations along with MSIL plants on the given dates.
As per vehicle registration data supplied by the Federation of Automobile Dealers Association (FADA), Maruti Suzuki improved its market share in FY21 to 48.86 percent from 47.83 percent clocked in FY20. The company witnessed improvement in demand from the rural pockets during the whole of FY21.
“The rural growth last year was about 7 percent and therefore the overall increase in the rural contribution to total sales was about 2.5 percent. So, from 38.5 percent it has gone up to 41 percent. Rural should be able to continue to see the upswing”, Srivastava added.
Maruti Suzuki is one of the companies from the automotive space to have announced a shutdown of manufacturing operations. Toyota Kirloskar, MG Motor India, Honda Motorcycle, Scooter India and Hero Motocorp
have also announced similar shutdowns.