by Editor News
Maruti Suzuki has been shutting down its plants periodically to adjust production.
Maruti Suzuki plants in India will likely to operate just one shift as the demand for cars is falling all across the country and causing inventory to bloat ahead of the traditional festive season. The manufacturer that sells one in two cars in India might cut down one shift even at the Manesar plant, which will now likely join the Gurugram & Gujarat facilities in operating below capacity.
The plant in Manesar has a yearly capacity of 750,000 units, and it produces cars like Ertiga, Swift, Dzire, Wagon-R and Baleno. Cutting the production of Swift and Baleno will lead to hundreds of job losses for contractual staff. With all plants likely to move to a single shift, more jobs are likely to be at risk.
Late last month, Nissan had also announced a global cut down affecting 12,500 jobs, and about a seventh of those jobs was likely to be affected in India. Passenger car sales in India have declined rapidly, with July witnessing the worst shrinkage in about two decades. Monthly car sales have dropped for nine months in a row, falling in 12 of the previous 13 months.
The growth of the industry is likely to face challenges in FY20 due to the slowdown and the significant increase in car prices from regulatory changes (new safety and BS-VI emission norms). Similarly, Credit Suisse cut volume and margins estimates for FY20 and FY21, translating into 15 per cent and 9 per cent EPS cuts, respectively.
Maruti Suzuki has been shutting down its plants periodically to adjust production. In August, just before Onam and Ganesh Chaturthi, there are at least three days of shutdown planned by the company, and these cut downs were not in the original schedule. In FY20 so far, Maruti Suzuki has cut production by 10 per cent.
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