Maruti Suzuki to shut production for 2 days to cut inventory

Maruti Suzuki India Ltd, the country's largest carmaker, said it would shut production at its five plants for two day on 7 and 8 June, besides its bi-annual shutdown slated for 17 to 22 June, as it tries to unwind its inventory amidst falling sales.

While the company will keep all its plants shut on Friday, it has decided to take Saturday as a scheduled holiday, a company spokesperson said.

Maruti Suzuki said its five plants across Gurgaon and Manesar would remain closed for a total of eight days in June as it aims to adjust inventory amidst sluggish demand.

Maruti Suzuki, with an annual production capacity of 15 lakh cars, has been producing about 5,000 vehicles per day on average at the two facilities, located in Manesar and Gurgaon.

An eight-day closure would mean a reduction of about 40,000 cars from its inventory.

Maruti Suzuki India Ltd, majority owned by Japan's Suzuki Motor Corp, reported a 13 per cent drop in domestic car sales in May, with the Indian car market battling its worst slump in 12 years, amidst high interest rates, rising fuel prices.

This is the second time that Maruti Suzuki is shutting down production, after it closed production at its Gurgaon plant on 9 March amidst declining demand for its petrol models like Alto and WagonR.

Maruti Suzuki had produced 11.68 lakh cars in the 2012-13 financial year of which it sold 10.51 lakh units in the local market and exported around 1.20 lakh.

The sluggish market, however, has not deterred Maruti Suzuki from capacity addition. The company is going ahead with its plans to start third plant at Manesar, which will go on stream around September this year, raising cumulative production capacity from 15 lakh units to 17.5 lakh units.