Maruti Suzuki may face production constraints next year

Maruti Suzuki might face production constraints in 2016 considering the delays in approvals for the new production plant in Gujarat. The new manufacturing plant is expected to take the production load of the upcoming products.

Currently, the manufacturer has production facilities in Manesar and Gurgaon which have an annual production capacity of 1.5 million units of vehicles. This capacity will be used to its full extent by next year and they will need a new plant to expand their production capacities. If there is a delay in the production at the new plant, the company might face an issue to ramp up the production for their future launches.

The company is banking on its new and facelifted products which includes the Ciaz Hybrid, compact hatchback YRA (Baleno) and compact SUV (based on the Alpha concept) in this fiscal year to increase their sales. Maruti Suzuki sold 1.29 vehicles last year registering a hike in sales of 11.1 per cent in comparison to the sales numbers of the previous year. Even if they run their production capacities to the full extent, they can achieve of about 15 per cent growth. This is not going to be enough for their new line-up and this is where the Gujarat plant would help ease the load.

Nevertheless, we expect that the carmaker has foreseen this and made necessary arrangements at their current production facilities to address the possible difficulties.

Source: Business-Standard