Maruti shuts Swift,Dzire production at Gurgaon

Maruti Suzuki has stopped production of two of its top-selling models,the Swift premium hatchback and Dzire compact sedan at its Gurgaon plant from mid-June.

Written by Roudra Bhattacharya | New Delhi | Published: July 5, 2013 4:34:34 am

* Both models to be made only at Manesar

* Low demand bites; competition rises from Honda Amaze,Ford EcoSport

Maruti Suzuki has stopped production of two of its top-selling models,the Swift premium hatchback and Dzire compact sedan at its Gurgaon plant from mid-June. The move comes as monthly volumes for both models decline on the back of falling demand and competition from aggressively-priced rivals like the Honda Amaze,Ford EcoSport and Chevrolet Sail.

These two models,which remain among the three top-selling cars in the country,will now be made solely at Maruti’s Manesar facility after almost two years of being intermittently produced at both plants because of high market demand and the recurrent labour troubles in 2011 and 2012 at Manesar that had led to a drop in output in the same facility.

The Swift,in fact,had originally started its India innings from the Gurgaon plant in 2005,but had later shifted production to Manesar when the new plant came up in 2006. But,from around 2010,both facilities were roped in to produce the car to cope with the high demand,though Gurgaon focussed largely on the final assembly. The Dzire has also followed a similar trend and has been made at both plants since 2011,even as Manesar catered to bulk of the demand for the car.

“The production of both cars have been stopped at Gurgaon from around June 15 as the demand is lower than before and the Manesar output has been steadily increased after the strike. A few hundred units of both models were earlier assembled at the Gurgaon plant to cater to the high demand,” a source close to the development told FE.

When contacted,a company spokesperson said: “The change in production location for the Dzire from Gurgaon to Manesar has nothing to do with the market situation. We were making negligible numbers of the Dzire at Gurgaon. We decided to consolidate the production of DZire at a single location at Manesar for better resource utilisation. We were not manufacturing the Swift in Gurgaon.”

Lower demand and rising inventory levels had also led the car market leader to

shut its Gurgaon and Manesar plants several times in last few months (twice in May itself).

Both the Swift and Dzire have laid claim to the top spot in the Indian car market in the past. The Swift led the industry in April 2012 (19,484 units) beating the Alto,while the Dzire was crowned king for a month in May (17,265 units) this year,again beating the Alto to the top.

However,monthly volumes have taken a hit this year. From the highs of over 20,000 units a month in May 2012 and 16,531 units in April 2013,volumes for the Swift fell to 14,353 units in May this year. For the Dzire,volumes in May 2013 stood at 17,265 units,lower than 19,446 units sold in the previous month of April,but similar to the 17,707 units sold in May last year.

In May,overall passenger vehicle sales fell 9% to 3.01 lakh units,with Maruti,which commands around 40% market share,witnessing a 13% drop in volumes at 77,821 units. The Maruti Suzuki scrip closed 0.14% down at R1,558.90 on the BSE on Thursday.

Among competitors eating into Maruti’s stronghold,the Honda Amaze has picked up volumes steadily since launch in April on the back of an aggressive R4.99 lakh starting price,which is the same as that of the Dzire.

The Amaze sold 6,036 units

in May and 4,965 units in June and still commands a waiting period of up to 3-4 months because of a production constraint.

Fresh trouble for the Swift and Dzire is now expected from the Ford EcoSport,which was launched in June starting at R 5.6 lakh.

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