Maruti may cut production to tide over sluggish demand

Maruti Suzuki, the country's largest car maker, today said it may consider production cut if the market does not improve as it expects sales growth to remain flat in the current financial year.

"I hope not, but if we are obliged, then we will do it," he told reporters here when asked if the company would go for a production cut.

Across the world there has been a slowdown in demand, including China, India and other BRIC countries, which has made the company to respond appropriately, Maruti Suzuki India Managing Director Shinzo Nakanishi said.

The company had already cut production in November by 6.29 per cent at 63,431 units as against 67,690 units in the same month last year.

Nakanishi said the company's focus is on not letting inventories pile up, specially at the dealers end.

"We are focusing on the network stock. If the network stock is overflow, then we will have to readjust our productions," he said.

Asked if the quantum of cut would be the same in December, Nakanishi said: "I don't think so. I hope it will be less than that (of November)."

He said the company will produce a "few per cent" less in December compared with the same month last year.

In November, the company's passenger car sales dipped by 24.84 per cent at 43,258 units against 57,554 units in the same month last year.

Commenting on the company's sales growth prospects this fiscal, MSI Chairman R C Bhargava said: "Compared to last year, I doubt there will be growth. It may be just about (the same) level with last year. If we have level (sic) with last year, then we have done very well."