Maruti Suzuki is facing tough days as they had to shut down production for one day at their Manesar and Gurugram facility. The manufacturer is said to have alarmingly high levels of inventory with the dealers and their stockyards, forcing them to take a break from the production process for an entire day.
The employees got a day off on Monday as the company was facing stock management issue around that time. The combined annual production from both these facilities is approx 15.5 lakh units while the company has not yet commented on the surprising move officially.
The reduction in production capacity has already been implemented in April 2019 by approx 10% but still, it seems like the slowing down of sales will have a big impact on the company’s profits. The overall drop in sales in the Indian market is around 17% while Maruti Suzuki still holds around 52% of the market share. In accordance with the drop, they have the biggest falling number, totalling in such a way that many brands would fit into that number for the Indian market.
The market scenario is worst in comparison to any random month from the last eight years and the impact seen on the big brands is harsher than the small portion of the number lost by some other brands. Maruti Suzuki has already discussed the need to consider new products that will bring big numbers for the coming months. On the other hand, their recent dealer-meet concluded on a sad note that many dealer partners have gone out of the game due to pilling loses.
The branding of Arena dealership network required a large number of funds while Nexa is facing halts with negative growth for products like Ignis and S-Cross. The 3-year insurance rule and rising on-road costs further contributed to the tough scenario for Maruti Suzuki.