Maruti increases production to catch-up with the high demand,

Maruti Suzuki, the largest car maker in India, is working hard to catch-up with the whooping supply backlog, which has threatened company's long held market share of more than 50%, in India. According to news reports the company is pressing its vendors hard to speed up their investment plans, so that the existing huge demand-supply gap can be filled.

Maruti India has designed a new programme in which it is working with vendors to identify fund-raising problems, chalk out investment plans and plan capacity schedules, a leading business news paper in India reported. The vendors put new investments in place, only after seeing the actual demand, and it many time results in a huge demand supply mismatch.

In that situation, company is telling vendors ‘they better start investing now because all indicators are that the market will grow so if they don’t invest now, they will be in trouble and company will be in trouble along with them, said, Maruti Suzuki chairman RC Bhargava. Company is short of capacity in the conventional sense but its production team says they can give up to 12-13% extra capacity over last year, he added.

Even after producing more than 1 million cars last fiscal the company is facing a serious capacity crunch as waiting period of some of its popular cars in India has reached-up to 3 months including Maruti Swift and Swift Dzire. However, Maruti has announced that it will increase its manufacturing capacity to 1.2 million through more efficient production management, within next 12-18 months.