Maruti Suzuki India losing customers due to production constraints

On one side Maruti Suzuki India is planning to ramp up its production while on the other side the company has given a statement which says that it expects its sales to slow down in the second half of this fiscal. Shashank Srivastava, company general manager (marketing) commented that the company was losing customers because of high waiting period of some of its models. He was quoted saying that MSI is losing customers. The company’s market share went down because it could not supply.The company had  production constraints.

Both R C Bhargava, Maruti Suzuki India Chairman and Osamu Suzuki, Suzuki Chairman have separately stated that the company is gearing up for a third production unit at Manesar. At the shareholder meeting of the company last week, Suzuki announced its plan of investing Rs 1,925 crore for the company's third plant. It is expected that the third plant will ramp up the annual production capacity by 2.5 lakh units by 2012-13. The Swift model of the company has a waiting period of three to four months while that of Ritz is around two months. The customers need to wait close to five months for delivery of a DZiRE and also a similar period for the multi-purpose vehicle Eeco. Due to these long waiting periods for delivery, the sales are getting affected. In the month of July, Maruti had seen its market share in the passenger car segment drop below 50 per cent for the first time.  The sales figures of August month released by the SIAM ( Society of Indian Automobile Manufacturers) showed that Maruti’s market share for the month fell to 45.38 per cent.

Srivastava also stated that Maruti Suzuki India is expecting its sales momentum to slow down during the second half of 2010-11 compared to over 25 per cent growth achieved so far this fiscal. He commented that the growth will be tough to maintain. In the second half, growth will be moderate compared to the first half, added Srivastava. He was also quoted saying that one of the main reasons for low growth in rest of the fiscal will be high base effect of last year. In the second half of last fiscal, the market became very strong, reasoned Srivastava.

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