Maruti looking to enhance flexibility in production to roll out vehicles as per market demand
Maruti Suzuki India is looking to bring in more flexibility in its production processes in order to produce vehicles as per the evolving market scenario, according to a senior company official. The country's largest carmaker is looking to strengthen the production of high selling utility vehicles while curtailing the roll out of the entry level cars.
«Diverging demand patterns between utility vehicles and the small car segment is continuing.
The company is working on increasing the flexibility in operations to produce vehicles as per the evolving market demand,» Maruti Suzuki India Executive Officer Corporate Affairs Rahul Bharti said in an analyst call.
He noted that the automaker has discovered that one of the reasons for the recent dip in the margins is because it was producing «some slow-moving cars».
«And we did not have sufficient production capacity for the cars that had demand.
If we had the flexibility of both, whether it is semiconductor supplies or in-house production, we would probably have less of such a problem,» Bharti said. Hence, it's a conscious move to increase the flexibility of production operations, he added.
MSI currently has an installed production capacity of around 23 lakh units per annum spread across its plants in Haryana and Gujarat.
Bharti said the initiative «comes at a small cost» as it involves a slightly suboptimal format of production.
Elaborating on the drop in sales of the entry level cars, he noted that the cost of acquisition has gone up disproportionately because of the increased regulatory intensity in the past few years.
«And the income of the customer in this segment has not taken off.
