Maruti plans output cut if demand is slack

[sajiv]

Maruti Suzuki India on Wednesday said it may resort to production cut if the demand does not pick up. "Across the world there has been a slowdown in demand, including China, India and other BRIC countries, which has made the company to respond appropriately," said Shinzo Nakanishi, managing director, Maruti Suzuki India, adding that the company's focus is to keep inventory levels under control, especially at the dealers end.

"We are focusing on the network stock. If the network stock overflows, then we will have to readjust our productions," he said. Maruti is not the only passenger car manufacturer who would resort to ways like cut in production. In the past, companies like Toyota Kirloskar Motor and Honda Siel Cars India have also announced a cut in production to keep a check on their inventory levels. However, Maruti are tight-lipped about the quantum of production cut that will happen in December. In fact, Maruti had already cut production in November by 6.29% at 63,431 units as against 67,690 units in the same month last year. However, the company feels that the cut in December would be comparatively lower. "I don't think that the cut in production would be same as last month. I hope it will be less than that (of November)," Nakanishi said, adding that the company will produce a few per cent less in December compared with the same month last year.

Nakanishi was speaking at the launch of company's national road safety mission under which Maruti Suzuki India will train 5,00,000 people in safe driving in the next three years across India.

According to the Society of Indian Automobile Manufacturers, sales of Maruti Suzuki went down by 24.84% in November at 43,258 units as compared to 57,554 units in the same month last year. Even the overall passenger car industry went down by 19.4% at 83,059 units vis-à-vis 1,03,031 units during the corresponding month last year.

The company, which has been negotiating contract manufacturing deal for its A-Star model with Nissan, also expects to start exports for the Japanese car maker in the first quarter of next year.

[sajiv]

Maruti mulls production cut to tide over sluggish demand
New Delhi: The country's largest car maker, Maruti Suzuki, today said it may consider production cut if the market does not improve as it expects sales growth to remain flat in the current financial year.
"I hope not, but if we are obliged, then we will do it," he told reporters here when asked if the company would go for a production cut.

Across the world there has been a slowdown in demand, including China, India and other BRIC countries, which has made the company to respond appropriately, Maruti Suzuki India Managing Director Shinzo Nakanishi said.

The company had already cut production in November by 6.29 per cent at 63,431 units against 67,690 units in the same month last year.

Nakanishi said the company's focus is on not letting inventories pile up, specially at the dealers end.

"We are focusing on the network stock. If the network stock is overflow, then we will have to readjust our productions," he said.

Asked if the quantum of cut would be the same in December, Nakanishi said: "I don't think so. I hope it will be less than that (of November)." He said the company will produce a "few per cent" less in December compared with the same month last year.

In November, the company's passenger car sales dipped by 24.84 per cent at 43,258 units against 57,554 units in the same month last year.

Commenting on the company's sales growth prospects this fiscal, MSI Chairman R C Bhargava said: "Compared to last year, I doubt there will be growth. It may be just about (the same) level with last year. If we have level (sic) with last year, then we have done very well.