New Delhi: Low base of last July has helped Maruti Suzuki India report decent sales growth this July despite its Manesar plant being under lockout for almost half the month.
Last July too, labour trouble at Manesar had pulled down sales by about 25 percent, said a company executive. This meant that sales this July were comparatively better. Piled up inventories of some models due to an overall market slowdown also helped matters.
So overall domestic sales of the country’s largest car maker were up almost 7 percent to 71,024 units (66504 units) while exports grew 27.4 percent to 11,210 units (8,796 units). The executive quoted above said about 18,000 units were ready at the Manesar facility before the riot broke out on 18 July.
Diesel and petrol variants of the SX4, Dzire and Swift are manufactured at Manesar apart from A-Star. After the lockout and complete stoppage of production, about 1.2 lakh units of the Swift and its notchback Dzire are on waitlist. There is no clarity yet if some production of diesel models would be shifted to Gurgaon.
Maruti said it has begun an extensive progarmme with its dealers to keep customers informed about the production constraints and consequent delay in supplies.
In their report on Monday, Umesh Karne and Manashwi Banerjee of BRICS Securities had cautioned that Maruti’s customers will stay loyal to the brand only if production resumes at Manesar in the next 10-15 days. “But if the lockout extends to beyond a month and more, then its customers are likely to shift. According to our channel checks, Maruti’s cars are in high demand (Waiting period for diesel cars is 2-3 months)”. These two analysts have estimated that since the lockout, Maruti has lost 1,500 units in sales and Rs 750 crore in revenue.
Last month, Maruti’s mini car brigade again lagged, with combined sales of M800, Alto, A-Star and Wagon R down by almost 24 percent to 28,998 units (30,028 units). But sales of Dzire sedan almost quadrupled year on year to 11413 units (3021 units). Also, combined sales of Swift, Estilo and Ritz were up 73.2 percent to 15,759 units (9099) units. The mini segment debacle was enhanced in the case of SX4, where sales fell 70.5% to just 679 units (2303 units). In UV category, Ertiga was almost single handedly responsible for more than a 10-fold jump in year-on-year sales at 7294 units (642 units).
But how will Maruti keep up with its own sales target this month onward unless production resumes at Manesar? A Mint story said today that most executives of Maruti who were injured in the assault by workers at Manesar are refusing to rejoin work, possibly delaying the resumption of production at the factory. While some executives are still willing to join work, those with under five years of work experience are reluctant to return for fear of a threat to their lives. But a company spokesperson denied this, saying since the company itself has not decided when to lift the lockout and none of its executives have expressed apprehensions about returning to work. However, a late night statement yesterday by Maruti did acknowledge that executives are being given psychiatric counselling to be rehabilitated.
Another flashpoint is being readied in the troubled relations between Maruti and its workers at Manesar – the company has not paid salaries to anyone associated with the Manesar plant for July, saying there is no provision for salary payment during lockout.