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Post-strike, maintenance shutdown to hit Maruti Suzuki

By Motortrend India Staff   |   29 June,2011

Production at Maruti Suzuki is expected to dip to a two-year low in June, as the country’s top carmaker emerges from a strike at its Manesar plant and a scheduled maintenance shutdown this month.

Maruti, which accounts for over half of the cars produced in India, is expected to produce 60,000-65,000 cars in June, against the monthly average of 100,000 units it manufacturers at its four plants, sources said. The company had dispatched 72,812 cars in June last year.

The production loss is also likely to stretch the waiting period for its popular Swift and A-Star hatchbacks and the DZiRE and SX4 sedans, which are manufactured at the company’s Manesar plant where a 13-day strike earlier this month over recognition of a new workers’ union led to a loss of Rs 630 crore with 13,500 cars less produced.

Output dropped by another 25,000 units following a weeklong maintenance shutdown at all its facilities, which ended on Saturday, industry executives said. However, lower output is likely to be offset by a weak domestic market. After hovering at near 30 percent in the last two years, car sales growth in India stood at 11 percent in the first two months of the current fiscal, as rising fuel costs and costlier loans kept potential buyers at bay. Maruti did not respond to ET's email enquiry on its production issues.

“The demand has been sluggish over the past few months, and the slower delivery of cars has not impacted our inventory so far. While dispatches from factory were lower this month, the overall weak consumer sentiment has not derailed sales, except for few high-demand models like Swift and DZiRE,” a Delhi-based dealer said.

Maruti Suzuki’s May domestic sales were up 4 percent at 93,519 units while Maruti’s exports in April-May dipped 18 percent to 20,565 cars.

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