Gurgaon, Jul 24: Swift, one of India's largest selling cars and a best-seller from the Maruti stable, will soon run out of stock as the company is not expected to revive production at the violence-hit Manesar plant, its sole manufacturing facility, any time soon, ‘The Economic Times' reports.
The development is likely to further increase the waiting period for customers, affect suppliers dependent on the car, and hit sales.
"We will not be able to make Swift this time as the Manesar plant is totally shut, unlike last year when we were making the car frame and shifting it to Gurgaon for final assembly. This time, we have no certainty on the production schedule of these high-selling cars as the situation is much more grave," Maruti Managing Director S Nakanishi told ET.
Swift outsold every single car in India and also overtook the largest-selling car Alto hatchback earlier this year as demand shifted to fuel-efficient diesel cars. Maruti sold 55,216 Swift in the first three months, a year-on-year rise of 68%, while the DZire compact sedan sales jumped 87% to 46,958 cars. The Swift-DZire sedan, which is based on the same model, sells around 32,000-35,000 units every month constituting over 35% of Maruti's sales in the domestic market.
Maruti Suzuki's latest industrial problem has badly affected dealers and the management who have been banking on the success of the two models to drive sales and regain market share lost due to last year's strikes.
The car has a waiting period of over 2-3 months across different market and also offers highest margins across all Maruti products, but given the uncertainty, dealers have informed customers about the longer period for delivery.
"We are already informing customers to experience much longer waiting duration for Swift and DZire.," said a Delhi-based Maruti dealer.
"There is a waiting period of three months on diesel Swift or Swift Dzire. However, we are sensitising customers that if there is any change in delivery period than what is committed, we will keep them informed. And with this understanding, customers can make the booking," Jayendra Kachalia, director of Mumbai-based Navnit Motors, said.
Maruti share dipped 5.65% on Monday to close at Rs 1,079 at close of trade on BSE. The company has declared an indefinite lockout at its Manesar plant on Saturday that directly scripted the negative impact on its shares on Monday.
Maruti's problems could change the game for rivals such as Toyota Kirloksar Motors which makes the Etios-Liva range, Ford India with its recently-launched Ford Classic. Both are pitted against Maruti Suzuki Dzire and in the hatchback space, Hyundai may get additional customers for its relaunched i20 hatchback. Tata Motors may also witness higher demand for its Indigo-Indica range in coming months.
Maruti's rival carmakers grabbed 6% market share in the last fiscal as Maruti's output and sales declined sharply following three consecutive strikes.
Last Wednesday's mishap, however, comes when the industry is also sitting on an inventory of over 2,50,000 to 3,00,000 units. Suppliers dealing with Maruti Suzuki's rivals say it may help ease inventory but production schedules are unlikely to be affected much.
"Last time around, some of the automakers had cashed in on short supply of Maruti Suzuki products by increasing production at their end, but this time around, every automaker is sitting on huge pile of inventory, so if anything, the other automaker may be able to release some inventory in the market ahead of festive season," said an executive with a leading auto component company located in Pune.
Maruti production woes could also extend to its 270 vendors and component suppliers who are already reeling under the impact of the violence. Auto parts maker GNA Ltd, which supplies propelling shaft and intermediate shaft assemblies for the Swift and Dzire models, has stopped all supplies. "There are no orders for the Manesar plant and all supplies have been stopped completely after the violence incident hit the plant," said director Ranbir Singh.
Ludhiana-based GS Auto, which supplies fasteners to Maruti Suzuki, has curtailed all supplies claiming that the company has not confirmed any future plans on its production schedule.
