Move may help counter daily loss of Rs 70 crore from the Manesar lockout
With the production of its best-selling models Swift and DZire stalled at the Manesar facility, Maruti Suzuki is now exploring possibilities to ramp up the production capacity of diesel vehicles at its Gurgaon unit. The company rolls out its newly launched multi purpose vehicle (MUV) Ertiga and premium hatchback Ritz from this facility.
A senior Maruti Suzuki executive said, “We operated three shifts at Suzuki Powertrain India. Since the lock-out at the Manesar facility, we have curtailed production and are now running only two shifts a day. While production of transmissions would remain relatively unaffected, since these are used on all our models, the excess diesel engines may be used for increasing production of diesel vehicles at our Gurgaon unit.”
Suzuki Powertrain produced 1,100 diesel engines and 3,600 transmissions a day, on a three-shift basis. Maruti Suzuki uses the same 1.3-litre diesel engine sourced from Fiat for all its five diesel cars — Swift, DZire, Ritz, SX4 and Ertiga. Of these, Swift, DZire and SX4 are produced at the Manesar unit.
The changes being considered in the production processes may help counter a daily revenue loss of Rs 70 crore the company has been incurring, owing to the lockout at the Manesar facility.
Though Ritz sales have remained largely stagnant, at about 6,000 units every month, Ertiga already has an order book of 32,000 units. Currently, the waiting period for the MUV’s top-end variant goes up to six months. “We have already increased the production capacity of the Ertiga by about 40 per cent and now roll out 7,000 units every month. We are looking at increasing production of the Ertiga and are evaluating the capability of our vendors to supply components before freezing plans,” said another company official.
The Swift and DZire models, which account for about 35 per cent of the company’s monthly sales, have a combined backlog of about 1,10,000 units. For the quarter ended June, sales of the company’s diesel vehicles rose about 90 per cent year-on-year, while sales of petrol vehicles fell 8.6 per cent.
Meanwhile, representatives of the workers’ union at Suzuki Powertrain India said with production cut about 30 per cent, many contract workers had been asked to leave. Speaking on condition of anonymity, a union member said, “About 250 contract workers, whose initial tenure came to a end, were asked to leave. The company has decided not to recruit fresh workers at present.” Suzuki Powertrain India employs about 2,000 permanent workers and 900 contract workers.
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