Maruti Suzuki raises production target by 6% for this fiscal amid hopes of slight recovery in auto sector

  • On Wednesday, automobile dealers' body FADA had said retail sales of passenger vehicles in November increased 1% to 2,57,271 units

  • In November, MSI increased its production by 4.33%, after having reduced output for nine straight months due to lower demand

  • Early last month, Maruti Suzuki had said that it resumed the second shift at its Gurugram facility in October after a revival in demand for cars during this festival season

The country's largest carmaker Maruti Suzuki India reportedly increased its manufacturing target of vehicles keeping in view the slight improvement in the crisis-hit auto sector in the recent past, according to a media report.

The Suzuki Motor Corp unit hiked the target for this financial year by 6 percent, or 60,000 units, to 1.65 million vehicles, said a report in Mint quoting people in the know of the development.

Maruti Suzuki India (MSI) raised the production target because of expectations of a surge in demand during the remaining part of this financial year with the rollout of more cars compliant with Bharat Stage-VI (BS-VI) emission norms and cheaper financing options to the buyers, said the report.

 Maruti Suzuki raises production target by 6% for this fiscal amid hopes of slight recovery in auto sector

Representational image. Reuters.

On Wednesday, automobile dealers' body FADA had said retail sales of passenger vehicles in November increased 1 percent to 2,57,271 units against the same period last year, driven by festive demand during the month.

According to the Federation of Automobile Dealers Associations (FADA), passenger vehicles (PV) sales stood at 2,55,535 units in November 2018.

Two-wheeler sales increased 3 percent to 17,05,495 units last month as compared with 16,60,082 units in the year-ago period.

November production hiked by 4%

Last month, MSI increased its production by 4.33 percent, after having reduced output for nine straight months due to lower demand.

The company produced a total of 1,41,834 units in November as against 1,35,946 units in the year-ago month, MSI said in a regulatory filing.

Passenger vehicles' production last month stood at 1,39,084 units as against 1,34,149 units in November 2018, an increase of 3.67 percent, it added.

Production of mini and compact segment cars, including Alto, new WagonR, Celerio, Ignis, Swift, Baleno and Dzire stood at 24,052 units as against 30,129 units in November last year, down 20.16 percent.

Early last month, Maruti Suzuki had said that it resumed the second shift at its Gurugram facility in October after a revival in demand for cars during this festival season. Gurgaon facility's second shift was suspended in June this year following slow demand. The auto major also employed about 500 temporary workers.

Maruti resorts to output cut, single shift system

The auto major had to cut production over the past nine months due to slump in demand. The company had also suspended production at its plants in Haryana. It had to resort to job cut as a result of slowing demand for vehicles.

In September this year, MSI had announced to shut down its Gurugram and Manesar plants in Haryana for two days after the crisis in the country's auto sector worsened due to falling sales.

The company said it would halt manufacturing operations at the two manufacturing facilities on 7 and 9 September.

In August this year, Maruti Suzuki had reportedly decided to implement single shift system in all its plants including Manesar giving signals of a production cut in the wake of a persistent slump in the demand for vehicles.

After MSI reduced its production by 33.99 percent in August, making it the seventh straight month it reduced its output, it again reduced its production in September by 17.48 percent, making it the eighth straight month it has lowered its output.

The company's move comes in the wake of an unprecedented slowdown in the domestic automobile industry, forcing auto companies to take production cuts in order to reduce inventory at dealerships.

In July, Maruti had reported 33.5 percent decline in total sales at 1,09,264 units. The company had sold 1,64,369 in July last year, MSI said in a statement.

Domestic sales declined by 36.3 percent at 98,210 units last month as against 1,54,150 units in the year ago month, it added.

As the crisis mounted, the country's biggest carmaker had said that it had cut the number of its temporary workers to cope with a slowdown in auto sales, adding to the jobless problem in Asia’s third-largest economy.

With PTI inputs

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Updated Date: Dec 13, 2019 16:07:05 IST