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Maruti Suzuki India Limited, and Hyundai Motor India have announced that they are planning to reduce production output to 70 percent of that of 2109. The announcement comes after the first quarter of the financial year has been a disaster as far as production and sales are concerned.
Maruti is more optimistic and hopes to sell 10 lakh units during the 2020-21 financial year, and expects production to increase to 90 percent during the fourth quarter of January to March next year.
The brand says that the want to own a vehicle, and pent-up demand has been helping with sales numbers, especially after some restrictions enforced during the lockdown have been eased.
The brand has notified its vendors to prepare for production of roughly 10.30 lakh units for the ongoing financial year - translating to a 16 percent decline form the previous financial year.
The company says that positive growth and recovery from the rural and semi-urban markets is encouraging, and the brand is positive about the long term sales figures.
Maruti sold roughly 18,500 units during April and May this year, and needs to retail 1.28 lakh units every month in order to meet its annual volume target.
The brand already has 90 percent of its nationwide dealers operational since the ease in restrictions, and have managed to hold bookings at 85 percent of pre-Covid levels.
Hyundai Motors India said that it currently has export commitments to hold, and that demand in the domestic markets for the new Creta and Verna should help meet the 5 lakh units in production mark - roughly 70 percent of production during the last financial year.
The brand has seen positive growth since the ease to lock down restrictions thanks to new models that were launched at the beginning of this year. The company's new Creta SUV has registered over 37,000 bookings.
Mr Ganesh Mani S, the Director of Production at Hyundai Motor said that while the brand aims to hit 70 percent of its previous years production output, it is aware that numbers could change because of developments in the Covid-19 situation. Hyundai has resumed production operations, and is working two shifts at its facilities.
Thoughts About MSIL And Hyundai Reducing Production Output By 30 Percent
This is a good decision by both brands. The first two months of the April-June quarter of the financial year has been a total washout for the industry as far as production is concerned.
Manufacturers are also expecting sales figures to increase at a slower pace than before. We think a 30 percent reduction in production volumes is fair.