Maruti Suzuki has cut its vehicle production by around 21% y-o-y across its factories in March as dealers are saddled with high inventories amid demand slowdown. In February too, Maruti had cut production by over 8%.
The company shared the production figures with the stock exchanges, which showed output of passenger vehicles including Alto, Swift, Dzire and Vitara Brezza was down 20.6% y-o-y in March.
Early this week, Maruti Suzuki chairman RC Bhargava said the company is not cutting production but adjusting it to manage inventory. Most dealers of Maruti Suzuki have inventory of around five to six weeks, higher than the normal three to four weeks.
The growth of Maruti Suzuki, which was consistently in nearly double-digits in the past 4-5 years, has fallen to 5% in FY19 due to factors including rise in insurance premiums, costlier finance and elections related uncertainity. Bhargava said evidence of the past two general elections show that in the year before the elections, sales slow down considerably and pick up after polls are over.
Barring vans, the company reduced production of all other segments including that of its big selling compact and utility segments.
Earlier, a Maruti Suzuki union member told FE that production has been lesser since December. The company took a nearly 30,000 unit production cut in December as stock piled up from the festive months owing to poor demand. It produced 1.06 lakh units compared to about 1.4 lakh units produced every month. While output got back to normal levels in the last two months as retails rose due to discounts, most of the dealers now are back with over 50 days stock.