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Old 12th August 2015, 18:15   #1
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Default Maruti-Suzuki might run out of production capacity by 2017?

Maruti Suzuki India Limited, India's largest car company, faces a production capacity crunch by the beginning of 2017, as per a report by Business Standard.

This is partly due to delays in getting approval for it's new manufacturing plant in Gujarat, and also due to full utilisation of production capacities in it's Gurgaon and Manesar plants by next year.

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“Our manufacturing capacity in Gurgaon and Manesar will be fully utilised next year, and we need new capacity,” said R C Bhargava, chairman, Maruti Suzuki, in the company’s annual report.

While Gujarat chief minister Anandiben Patel laid the foundation stone of Suzuki Motor Corporation’s first manufacturing line in the state in January this year, production is expected to begin only in 2017. Even this date could change in the event of shareholders blocking the move, which will result in further delays.

On the back of new launches and refurbishments, Maruti saw sales of 1.29 million vehicles last year, registering a growth of 11.1 per cent over the previous year, taking the pushing the market share to 45 per cent.

The combined capacity at both the existing plants of Maruti at Manesar and Gurgaon stands at 1.5 million units. This means the company will find it difficult to grow production at 15 per cent this year and the next.

Considering that new and refurbished products are due to hit showrooms later in the year along with continued growth in exports (last year exports grew 20 per cent), which form 10 per cent of Maruti’s total sales, the company could face a production constraint next year. This year’s export target would be to at least match the sales of last year if there is a no-growth scenario.

“The company ramped up production in the recently commissioned Manesar Plant-C while production from the Gurgaon facility remained at a level similar to that of the previous years,” said the annual report.
Business Standard
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Old 14th August 2015, 08:40   #2
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Default Re: Maruti-Suzuki might run out of production capacity by 2017?

Nice .

At a time when the laggards (Chevrolet, VW, Tata etc.) are battling excess capacity, Maruti, Hyundai & Honda are hitting their current production limits, and expanding the lines.

Hats off to Maruti & Hyundai for fiercely guarding their turf and aggressively fighting off the newcomers. Everyone though that Maruti & Hyundai will lose market-share with the entry of new brands & products.

Guess what?

The two actually increased their market-share , and the others ended up wounded. It's been a battle worth watching and I'm sure they aren't done yet.
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Old 14th August 2015, 08:53   #3
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Default Re: Maruti-Suzuki might run out of production capacity by 2017?

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Originally Posted by GTO View Post
Nice .
Yes very interesting indeed.
Market Dynamics !
Even more interesting is the latest Cheverolet advertisement , where they profess I CARE attitude by their staff. My wife commented " Care to thik hai Car konsi hai Care ke liye".
From the reports, the new Cruze seems to be an awesome vehicle and do hope the company is gearing up to have the support system in place.
What i want to highlight is that there are a lot of good products in the market but where most companies falter is the support system which leads to their downfall.
FIAT and Nissan are a case in point. Good products but after that zilch.
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Old 14th August 2015, 09:24   #4
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Default Re: Maruti-Suzuki might run out of production capacity by 2017?

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Originally Posted by nkghai View Post
Yes very interesting indeed.
Market Dynamics !
Even more interesting is the latest Cheverolet advertisement , where they profess I CARE attitude by their staff. My wife commented " Care to thik hai Car konsi hai Care ke liye".
From the reports, the new Cruze seems to be an awesome vehicle and do hope the company is gearing up to have the support system in place.
What i want to highlight is that there are a lot of good products in the market but where most companies falter is the support system which leads to their downfall.
FIAT and Nissan are a case in point. Good products but after that zilch.
You have raised a valid point. On the other hand companies like Fiat may think, if the engine and vehicle are reliable, robust and durable, what is the need for the customer to come to the service center frequently??

I am not justifying their marketing strategy but the above point i quoted is a valid one too. ( I feel so)
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Old 14th August 2015, 09:39   #5
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Default Re: Maruti-Suzuki might run out of production capacity by 2017?

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Originally Posted by suresh_gs View Post
what is the need for the customer to come to the service center frequently??

I am not justifying their marketing strategy but the above point i quoted is a valid one too. ( I feel so)
Ok. Its the same case as Fill it, shut it and Forget it campaign.
But i have a theory. If you see the number of new vehicles being sold, roughly 60% of these is the numbers of cars being sold in second hand market because we still are far away from every household owning two to three cars. And then they are used till minimum 15 yrs aging.
Now what is the worth if (a) Due to the support system the second hand value is so down that it is nonsensical value and (b) Why will a customer buy a second hand car which does not have an effective support system. Everyone wants a new car. Just because he is buying a second hand car due to some reasons ,it does not mean he has no aspirations of getting great treatment by the company.

This a cycle which has to be completed and in India without the support system companies will never be able to make inroads.

Last edited by nkghai : 14th August 2015 at 09:40.
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