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MSI loses $20 mn due to strike at Manesar plant

By Motortrend India Staff   |   07 June,2011

India’s largest passenger car maker Maruti Suzuki has lost an estimated 20 million dollars since the start of a strike at its factory in the north of the country, a company source said on Tuesday.

The source, who requested anonymity because they were not authorised to speak to the media on the subject, said production losses since the start of the strike on Saturday were between 800-900 million rupees.

The stoppage has led to a loss in production of about 1,800 cars since the walk-out by a group of workers demanding recognition of a new union.

The Japanese-controlled firm on Monday sacked 11 of its 2,000-strong employees on its production line at Manesar in the northern state of Haryana. “There is no work at the Manesar plant. The workers have refused to come to work”, the company official told AFP.

Maruti produces about 1,200 cars each day in two shifts at the production facility, mainly the high-end mid-sized cars like the Swift Dzire and the SX4.

The strike comes as Maruti car sales grew by 1.9 percent year-on-year to 104,073 in May, its slowest pace of growth in nearly three years, as demand for cars in India moderates due to rising input costs and costlier auto loans.

“There is no clear charter of demands. They cannot simply say they want a change”, the source added, calling the walk-out “illegal” as no notice had been given.

The company said delivery and sales of cars were unlikely to be affected. Its shares fell for the second straight day at the Bombay Stock Exchange, down as much as two percent to a day’s low of 1,206 rupees on Tuesday, in response to the strike.

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