After strike, Maruti gears upto meet demand backlog

With workers' strike at its Manesar (Haryana) plant finally over, Maruti Suzuki India Ltd (MSIL) is now gearing up to meet the backlog of around one lakh cars, which has accumulated due to the unrest since June. In the last five months, MSIL has seen plant operations been shut for almost 60 days and the company suffering a monetary loss of over Rs.2,200 crore.

On Saturday, it was normal operations at the Manesar plant that produces 1,200 units of MSIL's some of the most popular cars, including Swift. “The workers are back on the job…there is a full shift working at the Manesar plant. Our priority is to normalise the entire production as fast as possible as we have to clear huge backlog of orders,” an MSIL spokesperson said.

This year, MSIL has seen its Manesar plant shutting for 59 days — first time in June, then in September and now in October.

Production loss

Even the carmaker's Gurgaon plant had to be shut for three days due to the unrest, while its powertrain unit was also hit by the strike.

MSIL has lost production of almost 75,000 units due to the strike while its manufacturing of its popular K-series engine was also affected.

The strike for MSIL, which has been seeing long waiting period for its popular vehicles, at a time when the festival season sales were picking up, came as a big setback. While MSIL suffered a loss of Rs.2,200 crore, including around Rs.700 crore hit that its vendors took, the government also saw huge loss in its earnings. For the Union Finance Ministry, the deficit in terms of excise duty collections would be over Rs.500 crore, while for the Haryana Government the duty loss would be around Rs.50 crore.

But more than the monetary loss, it is reputation of Haryana, particularly the Gurgaon belt, as an investment destination has taken a severe hit.

As a result, the strike could force MSIL to think over the proposed Gujarat plant catering to domestic demand as well, while the initial idea was to keep it exclusively for exports as the carmaker has already invested in developing infrastructure at the Mundra port in the State.

MSIL has plans to invest Rs.18,000 crore for its new plant that would produce 20-lakh cars at its peak capacity.

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Printable version | Aug 6, 2021 10:23:20 AM |

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