Maruti Strikes Cut Suzuki's Global Performance

Published: Friday, February 3, 2012, 16:13 [IST]

The series of three strikes that happened at Maruti Suzuki's Manesar plant have resulted in a decline in Suzuki Motor Corp's global performance. The Japanese carmaker which had reported increased production and sales in the past 11 years has for the first time reported a decline in production. The production decline has been caused mainly due to the halt in production at Manesar.

Suzuki Motor Corp (SMC)'s global production saw a dip of 2.12 per cent after Maruti Suzuki's production saw a dip of 7 per cent. The one car whose production was severely affected was the new Swift hatchback. Waiting periods for the Swift continue to be high.

Suzuki depends on its Indian operations heavily. It is its most profitable division and has the highest volumes. SMC has operations in other countries such as Pakistan, Indonesia, Hungary and Thailand. But their total sales do not match the total sales of the Alto, India's highest selling car.

It may be recalled that the three strikes at Manesar lead to a production loss of 1.06 lakh cars. This also lead to Maruti Suzuki's market share dipping to 38 per cent and profits by 39 per cent. Maruti Suzuki will continue to be under pressure as global competitors such as Toyota and Honda have now entered the entry level small car segment that was previously dominated by the Indian carmaker and Hyundai.

Maruti's MD S Nakanishi has put in to words the position of the company by stating: “It is perhaps the toughest year for Maruti since inception. We expect a turnaround in the new year with four new launches and larger availability of diesel engines as per the market demand."

Maruti Suzuki's performance was also affected by the decreasing demand for its petrol cars such as the Alto, M800, A-Star and Zen Estilo.