Maruti Suzuki India Limited (MSIL) would probably be the only manufacturer in India who is immune when it comes to the economic term ‘slowdown’. On one hand where other manufacturers have been cutting down on production figures with diminishing demand, Maruti has been working overtime to clear the backlog for its cars. Frequent strikes by workers were making matters only worse leading to more inventory pile-up.
The Government’s recent announcement to deregulate diesel prices in the near future resulted a 5 percent drop in sales in the diesel car segment, but MSIL aloof to the trend hit back with a 22 percent increase of its diesel cars sales and expects to conclude the current financial year with the 4,00,000 mark.
MSIL will be commissioning a third assembly line at its Manesar facility in September this year to slash the backlog to some extent. The facility would enable MSIL to churn out approximately 2,50,000 cars in addition to the plant’s annual capacity of 1.5 million vehicles.
R C Bhargava, Chairman- MSIL commented “Plant C at Manesar will be commissioned later this year. We do have excess production for petrol cars. But the Manesar unit mostly produces diesel vehicles. With the diesel engine plant also scheduled to become operational around the same time, we will manufacture more diesel cars in line with market demand. We expect to sell around 465,000 diesel vehicles. There continues to remain a waiting list for our popular diesel models such as Swift, DZire and Ertiga.”
MSIL would be pumping in INR 1700 crores to augment their diesel manufacturing facility to 75% by the end of 2015 and expects the diesel variants to boost up the percentage share from 38 to 43 percent in annual sales.
Mayank Pareek, chief operating officer (sales and marketing), MSIL, said: “According to our agreement with Fiat, we started sourcing diesel engines from the company from around February last year. The growth rate may seem to have moderated, but it has come on a high base. We continue to have a combined order backlog of 83,000 for the Swift, DZire and Ertiga. The bookings are mostly for diesel variants.”
Source: Financial Express