It was anticipated that Maruti Suzuki India would witness a significant fall in production levels as a consequence of the worker strike followed by maintenance shut-downs of the manufacturing facilities. This would result in reduced vehicle availability and increased waiting time periods for several car models.
Production is Likely to Be Reduced Drastically
It was expected that Maruti would be producing about 60,000 to 65,000 cars in the month of June, which would fall far short of its normal production of about one lakh cars per month through its four plants in India. The reduction in production was due to the strike for 13 days at the plant in Manesar.
The strike alone accounted for production loss of about 13,500 cars worth about ₹630 crore.
Waiting Periods of Swift and Dzire May Increase
The disturbance was especially critical for the models that have been produced at the Manesar plant. These include the latest version of Maruti Swift, A-Star, Dzire, and SX4 that might see increased waiting periods.
With the reduction in the number of cars going to dealers, consumers might be driven towards other brands, especially with an increase in waiting period.
Maintenance Shutdown Increases The Stress
The production difficulty was aggravated by the planned maintenance shutdown in Maruti’s production plants. Such maintenance shut downs are always conducted by Maruti for the upkeep of its production equipment.
In addition, Maruti at that time was faced with subdued consumer demand within the domestic market. The high cost of petrol was slowing down passenger-car demand in the country.
Our View
This episode underscores how disturbances in one large manufacturing plant can easily lead to disruption in manufacturing processes as well as car availability. In the case of Maruti Suzuki, the combination of the strike at Manesar and maintenance meant that the company had an unusually difficult time in manufacturing these cars.
Customers buying a Swift, Dzire or any other such model made by Maruti would experience delays in deliveries. It would be important for the manufacturer to ensure that production is restored so as to avoid switching to other brands by customers.