Carmaker loses Rs 70 cr per day

The latest labour unrest leading to lock out of the Manesar (Haryana) plant of Maruti Suzuki is proving to be costly for the company. It has to endure a loss of at least Rs 70 crore per day and the current shutdown may last for months.

The Manesar plant’s main production includes the company’s best-selling models of Swift and the Swift DZire. The unit manufactures 1,600 vehicles a day on an average, accounting for 45 per cent of Maruti Suzuki’s overall production. The Manesar unit has been specially designed for manufacturing diesel cars.

The current impasse may have a telling impact on the finances of the company. Once the inventories’ sale gets over, the waiting period for Swift and DZire may go up by two-three months. That is if the plant shuts down for a month.

Thus, from the current waiting period for three months, a customer may have to wait for a DZire diesel variant for a minimum of five months which may further group depending on the lock-out period. The company may explore the option of shifting production of these popular models to the Gurgaon unit.

Company officials said it has an inventory of around 100,000 vehicles, including 15,000 units in stockyards at the Gurgaon and Manesar facilities. Vehicle despatch resumed at the plant on Friday amid police security.  

The company has already suffered a loss of nearly Rs 2500 crore because of the workers’ unrest thrice in the last one year at Manesar as each time the unit had to be shut for long periods.

Experts fear a repeat of last fiscal’s performance which fell short of target. The company could produce only 1.13 million cars last fiscal, which was 11 per cent lower over 1.27 million units produced in 2010-11. The target this time is to roll out 1.5 million units but with the current lock out, officials are sceptical over meeting the target.