Maruti, Hyundai focus on deliveries: Production remains low amid lockdown

Maruti has delivered 5,000 vehicles while Hyundai 2,771 delivered units. Both companies said that their vendors are also slowly resuming operations but it cannot be said that all of them are fully functional so constraints in full swing production will continue for sometime.

By:May 21, 2020 10:13 AM

 

Auto manufacturers may have re-opened their factories and spruced up their showrooms but are unlikely to step up production until they’ve cleared inventories. A quick poll reveals most automakers have about a month’s stock of vehicles in their yards and with dealers. Maruti Suzuki for instance, is not producing any cars just yet at either of its two plants. Although it has been permitted, by the Haryana government, to employ 100% of its workers, it is working with just 33% for the moment. Maruti had, earlier this week started operations at its second plant at Gurgaon after resuming operations at Manesar from May 12. The two plants during normal times produce 5,000 vehicles every month but as the company has around 130,000 cars in its inventory network – stockyards as well as dealers – the first attempt is to clear it.

Sources said that at the time of lockdown on March 25, there were around 67,000 bookings and this needs to be completed. Post-lockdown, almost half of these consumers are still interested in going ahead with their purchase. So far, the company has been able to open around 1,350 dealerships and delivered around 5,000 vehicles. The scene is not much different at Hyundai Motor India, the country’s second largest passenger vehicle manufacturer, which has also started work at its two plant at Sriperumbudur in Chennai from May 8. The company, which used to make 2,000 cars every day is currently making only 200 cars daily.

The focus for Hyundai is also to first clear inventories which it is hopeful of doing as around 5,379 of its showrooms have now begun functioning. Hyundai’s inventory is around 35,000. Hyundai’s bookings stood at 4,367 and it has since the opening of plant and showrooms delivered 2,771 vehicles. Both the companies said that their vendors are also slowly resuming operations but it cannot be said that all of them are fully functional so constraints in full swing production will continue for sometime. Further, the companies are in the process of ascertaining how much of customer enquiries come which would help them in gauging demand.

Though Tata Motors and Mahindra and Mahindra, the other two big players in the PV segment, did not share their bookings and deliveries, industry sources said the scenario is no different there also from Maruti and Hyundai. For instance, out of its six plants in the automotive segment, M&M has resumed operations in three – Nasik, Igatpuri, and Haridwar. However, actual production work has not started. Dealer checks indicate that M&M’s inventory in the PV segment is around 15,000 units.

Similarly, Tata Motors has started operations at both commercial and passenger vehicles plants located at Pantnagar (Uttarakhand), and Sanand (Gujarat). “Nearly 200 dealerships and 300 workshops for passenger vehicles and over 400 sales outlets and 885 workshops for commercial vehicles have begun operations with a new set of standard operating procedure defining minimal interactions and maintaining prudent social distance while engaging with customers. Over the last few days, customers have initiated new bookings, deliveries of passenger vehicles have commenced and workshops are seeing increasing inflow of vehicles for servicing,” the company said. Dealer checks indicate that the company’s inventory stands at around 20,000 units.

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