Home Car News Maruti Swift, Dzire, Alto production cut as sales decline

Maruti Swift, Dzire, Alto production cut as sales decline

Dealer yard stock is on the rise as sales fail to increase.

As sales diminish due to general slowdown in auto sector, India’s leading carmaker Maruti Suzuki has cut production by 10.3% in April 2019. This is the third consecutive month of production cuts for Maruti Suzuki. Production of even its bestselling cars such as Alto, Swift and Dzire have been reduced in February, March and April this year. To some extent, competitor products have also contributed to loss of sales and subsequent production cuts.

A look at the numbers submitted in regulatory filing reveals that Maruti’s total production including Super Carry LCV was 1,47,669 units in April 2019. This is 9.6% less than total production of 163,368 units recorded in April 2018. If we consider only passenger vehicles, total production has reduced by 10.3%, down from 1,61,370 units in April 2018 to 1,44,702 units in April 2019.

Maruti Suzuki is a leader in mini and compact segment, but production has been cut for cars in this segment also. Production cut for compact segment vehicles has been marginal though, down from 83,709 units in April 2018 to 83,411 units last month. Production cut for mini segment vehicles has been more substantial, down from 1,19,894 units in April 2018 to 1,06,184 units last month. This translates into 11.4% reduction.

Discount offers not helping in increasing sales.

Only utility vehicles bucked the trend, registering a decent growth of 8.4%. Utility vehicle production increased from 22,607 units in April last year to 24,516 units in April 2019. Production of Maruti Suzuki vans was cut by 25.8%, down from 14,407 units in April 2018 to 10,688 units last month. In February, total production was reduced by over 8%, down from 1,62,524 units in February 2018 to 1,48,959 units in February 2019. In March, production was reduced by 20.9% across all Maruti’s production facilities.

Maruti Suzuki’s total production capacity at its Gurgaon and Manesar plants is 15.5 lakh units per annum. Suzuki has a manufacturing unit in Hansalpur (Gujarat) as well, where there are two production lines of 2.5 lakh capacity each. However, only the first line is fully utilized, while the second line is yet to reach its maximum installed capacity.

Maruti has also announced that they will stop selling diesel cars by April 2020. The company wants to focus on petrol, CNG, hybrid and electric technology. This will result in the discontinuation of all diesel Maruti cars. Diesel cars accounted for 23% of total Maruti car sales in 2018, which stood at about 17 lakh.

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