Maruti looks at ways to ease capacity constraints

Exploring ways to enable 15-20 per cent more output by 2011-12

With demand for automobiles expected to post strong growth numbers in the coming months, the country’s largest car manufacturer, Maruti Suzuki India Ltd (MSIL), is looking at ways to ease capacity constraints to enable 15-20 per cent more output by 2011-12.

M M Singh, managing executive officer (production), said: “We are operating at over 100 per cent capacity. Yet, there is a waiting list on our products. The second plant at Manesar (near Gurgaon) is expected to become operational only by the end of next year. Till then, we are exploring different ways to free up capacity in the existing facilities.”

The company has set up a flexi-line at its Gurgaon facility. The line will become operational in January and churn out 200 vehicles daily. With this, monthly production will rise to around 115,000 units from the present 110,000 units. More such measures are planned for implementation in the course of next year.

As opposed to an assembly line, designed to develop a specified set of products, a flexi-line can be used to roll out any model in accordance with demand. For instance, the Swift, Dzire and SX4 are made on the same line at the Manesar plant. At Gurgaon, a flexi-line is dedicatedly being put to use to churn out additional units of the company’s best-selling car, the Alto. Maruti sell 32,000 units of the Alto every month.

MSIL has three flexi-lines at its Gurgaon plant and two at Manesar. These five together assemble as much as 1,000 units per day. The cost of setting up a single line is Rs 5 crore.

To increase production, the company will also shift production of the Dzire from Manesar to Gurgaon by July. The hatchback, Swift, currently made at both the facilities, will be rolled out of Manesar only, sometime next year.

Flexi-skilling
Around half the 7,600-strong workforce is going through multi-skill training, so that they can assemble three to four different models of cars, rather than specialise in only one. “We are rotating workers between different units, so that they can assemble different models in our product range. This gives us flexibility in production,” Singh added.

He says utilisation of the machines has been raised from 85 per cent to over 90 per cent by increasing their efficiency. Maruti is investing Rs 3,625 crore to add another 500,000 units a year to its present tally of around 1.2 million by constructing two new plants at Manesar..

The company manufacturers 233 variants of 14 models across four plants at Gurgaon and Manesar. MSIL has registered growth of 32 per cent between April and November this year, selling 8,25,317 vehicles, as compared to the corresponding period last year.

To retain its market share, of 44-45 per cent, MSIL is further looking at adding products to expand its presence in the sedan and utility vehicle (UV) segments. While the Kizashi, a luxury sedan, is likely to hit the Indian roads by the middle of next year, the company is studying the R-III concept to develop a utility vehicle. The car is expected to be launched in the country in two years.

Shinzo Nakanishi, managing director, said, “The UV segment is growing by around 18 per cent. To tap into this segment is a challenge. If we can sell the R-III in this category, we can obtain significant share in the UV market. We can maintain the present share for now, but if the industry grows beyond seven million, it would be difficult for us to be at the current level.” On the cards are also plans to introduce a smaller sports utlity vehicle in the Indian market.