Maruti Suzuki India resumes production at Gurgaon and Manesar plants

Maruti Suzuki India, which had suspended operations at its Gurgaon and Manesar plants from February 20 (second half) due to the agitation in Haryana, has resumed production of vehicles, following gradual supply of components. The carmaker relies upon a just-in-time supply chain of components, most of which are sourced from manufacturers in nearby regions. Areas like Rohtak, Jhajjar, Bhiwani and Sonepat had been the worst hit and workers too were unable to travel to the manufacturing sites due to road blockages.    

Given that the two plants together produce around 5,000 vehicles a day, it is estimated that the carmaker would have lost production of around 15,500 vehicles between February 20 and today.  

Maruti Suzuki can ill-afford such production stoppages, particularly when it is seeing good demand in the face of rising competition. Autocar Professional had, a few days ago, reported that the carmaker is likely to see capacity constraints in the near future.

Speaking to reporters at the Make In India Week in Mumbai on February 17, chairman RC Bhargava had said that the company plans to employ interim measures to squeeze out more production from its existing manufacturing facilities in order to meet growing domestic demand and could end FY 2017 with a capacity of 1.55 million units.

The carmaker, which had produced 1,308,128 units in 2014-15 (+13.40% YoY) and sold 1,170,702  units (+11.11% YoY), is likely to finish FY 2016 with a production capacity of 1.45 million units.

While the Gurgaon plant has an annual production capacity of 700,000 cars in two shifts in three assembly facilities, the Manesar plant can produce 800,000 units in two shifts from three assembly facilities.

Maruti Suzuki India currently has a 46.91% market share in passenger vehicles (cars, utility vehicles and vans) and 52.70% in passenger cars.

With the new Gujarat plant set to open only around January 2017, Maruti is likely to face some capacity constraints, hence the move has become necessary, Bhargava added.

Commenting on the growth prospects for the country's largest carmaker, Bhargava hinted that repeating double-digit growth in FY 2017 would be difficult. "We are finalising our estimates. If not double-digit growth, we could see 8-9% growth in FY 2017," he said.