Maruti to begin production at Gujarat plant only by 2013-2014

When labour strike hit the Maruti India’s Manesar plant in Haryana, the auto major aggressively started looking at shifting its production house to other states. Mehsana plant in Gujarat seemed to be safety haven back then, but looks like Maruti India management might postpone the plans to another one or two years to 2013 or 2014. The deal with the Gujarat Government was finalised, land acquisition was done with, but there is one important factor stopping the auto major from taking this key step. There is absolutely no need to go for additional production when there is no demand.

The Maruti Suzuki India was clear right from the start that they would be looking at the additional set up of the production plant in Gujarat if their annual sales exceed the 1.8 million mark. By the overall market conditions and growth in the Indian car industry the target seems to be more feasible not until 2015-2016. Despite all the criteria for setting up a new plant in Gujarat is all set, the actual production is not likely to kickstart anytime soon says Maruti Suzuki MD Shinzo Nakanishi. The labour agitation hit the company factories not once or twice, but three times in a row affecting the auto major so drastically that the company still faces the reverberations until now delaying the deliveries of its best-selling models like Maruti Swift diesel, Maruti Swift Dzire and Maruti Alto hatchback.

The company went through an extremely gruesome period last year where the company suffered the sales slip by 2% in the April-Dec period of the current FY 2012-2013 and the MSI is working especially hard to keep up with the demand for the diesel cars as it offers the diesel variants only in the models – Maruti Swift, Maruti Ritz, Maruti SX4 sedan and Maruti Swift Dzire. Ramping up the production at the Manesar Plant B on one hand, the other strategy the auto major has adopted is to source the diesel engines from the ace supplier Fiat India to strike a balance between the demand and supply.  However, the Maruti Suzuki India is extremely positive and implemented a maximum price hike on the Maruti Swift diesel of Rs 17,000, while Maruti Alto price is upped by Rs 4,000 to go effective from Monday.