Covid-19 crisis: Maruti Suzuki production fell by 98% in May to 3,714 units

Maruti Suzuki revealed on Tuesday that owing to the lockdown it had to cut production by 97.54 per cent in May 2020 to 3,714 units. This is against an output of 151,188 cars in the same month last year.
 

The lockdown imposed by the government to curb the spread of coronavirus (Covid-19) had forced auto companies to shut their plants.
 

Maruti had first resumed production at its Manesar plant in Haryana on May 12 after closing down production for about 40 days. It resumed production at the Gurugram plant from May 18. The company cut production of its mini cars comprising Alto, and S-Presso by 98.32 per cent at 401 units against 23,874 units in the year-ago month. It reduced production of compact cars, including the WagonR, Celerio, Ignis, Swift, Baleno, Glanza (supplied to Toyota) and Dzire by 97.69 per cent at 1,950 units compared to 84,705 units in May last year. Production of utility vehicles such as Vitara Brezza, Ertiga and S-Cross, declined by 96.25 per cent to 928 units compared to 24,748 units a year ago.

Output is likely to be much lower than the optimum level as unavailability of labour and social distancing norms inside plants will impact production, Maruti chairman RC Bhargava had said. “There is too much of uncertainty currently to predict when there will be a recovery,” said Bhargava, highlighting that a substantial size of the workforce has gone away to villages. This has impacted production.
 

“It’s not easy to get back the manpower which has gone back. The new social distancing protocols also reduce productivity to an extent,” said Bhargava, when asked about the time it will take for the industry to recover.
 

However, the company has gone all out to push sales, throwing offers and attractive financing scheme to attract customers. On Tuesday, the company tied up with Mahindra Finance, one of the leading non-banking financial companies (NBFCs), to ease finance availability for customers.

Under the tie up, Maruti Suzuki customers can avail a wide range of options for getting their car financed from Mahindra Finance, including a buy now and pay later scheme. Under this, the company is offering a moratorium of 2 months to help customers manage their cash flows.
 

“Mahindra Finance is a very well networked NBFC present even in semi-rural and rural areas. More than one-third of Maruti Suzuki’s retail sales come from rural India. We are confident that this alliance with one of India’s largest NBFCs will help in increasing easy finance availability to our customers in the current challenging situation,” said Shashank Srivastava, executive director, marketing and sales, at the company.