Maruti Suzuki hit by Manesar riots, faces supply woes and slump in market share
Subscribe to NewsletterPlease fill your name and email ID to get our daily auto news mailer.
Following the violent clash at Maruti Suzuki’s Manesar plant, the largest car maker of the country has come to an edge of production loss, adding to the woes of their monthly supply. Before the riot also, the situation was slipping from the hands of the car maker as the demand for its bestsellers, Swift and DZire, was witnessing a regular surge with waiting periods of over five months.
On the other hand, the car maker has now faced a dip in its market share, with other auto companies taking benefit from the situation. The lockout at Maruti Suzuki’s Manesar unit has been around a long time, which seems that the same clouds of 2011 are surrounding the situation, when the protest by labour resulted in a massive loss for the company.
In 2011, when the production was suffered to a great extent, following the labour unrest at Manesar, the quarterly profits of the company were highly affected. At that time, the strike which remained operational for few weeks, led to the sales of the company dwindle to seven consecutive months during the period. In the last fiscal, the sales of the car maker dipped 11 per cent, which impacted almost 30 per cent of its annual profits.
Industry experts believe that the company will have to face the situation for at least a month with a daily loss of around $15 million in the terms of production. Last year in October, the key festive season of the country, the company witnessed labour unrest, which affected its sales a lot. And this time also the situations are likely to shuffle its entire operations for a couple of months, hampering this year’s festive season also for the Indian auto giant’s performance.
It is believed that the sales in Indian car industry rejoice a surge in the festive season, which is conventionally supposed to be a sacred time to buy new things, including cars.
The auto maker is already suffering from the production loss and adding fuel to its injuries, the investors pulled back their investments worth $700 million from the company’s shares, leaving a slump of over 10 percent since the strife took place at Manesar unit.
An Auto Analyst, Angel Broking, Mumbai commented, “If it takes around a month or so, then the volumes going into the festival season will be impacted, which could bring down the overall volumes for the company ... which was the case last year as well. They cannot achieve full production immediately once restarting the plant.”
With great loss bringing down the position of the company in the Indian auto market, analysts believe that the auto maker should quickly lead upon the whole situation and makes the circumstances favourable for itself.
- Piled-up inventory: A major cause of concern for car makers
- All units of Ferrari LaFerrari sold out
- BMW X6 M Design Edition introduced
- Honda City diesel to deliver best-in-class fuel economy
- Demand for diesel cars sees a drop in India
- Reasons behind the success of Hyundai Grand i10
- New Ford Mustang could make its way to India
- Third edition of Audi Twin Cup concluded in New Delhi
07 December 2013, 11:39 IST by CarTrade Editorial Team
As soon as the next-generation Honda City was unveiled, excitement levels in the entire Indian car market rose significantly. Now with the inclusion of diesel technology, Honda is putting high...
Under: Honda City
05 December 2013, 12:22 IST by CarTrade Editorial Team
According to recent reports, Honda Cars India Limited (HCIL) will increase price of its entire line-up from January first week in 2014. This is mainly to counter the booming inflation and...
04 December 2013, 11:55 IST by CarTrade Editorial Team
As the 2014 Auto Expo is fast approaching, the Indian car market is abuzz with presumptions about models that will be on display at the upcoming motor show. Major car companies like Maruti Suzuki,...
04 December 2013, 12:23 IST by CarTrade Editorial Team
In a recent development, Indian wing of US based car manufacturer, Ford, has announced its plans to introduce a small car in the country. The entry-level hatchback would be a part of Ford...