It was speculated that Maruti’s Manesar plant will be re-opened this week and an announcement on the same was likely to happen today. However, Maruti Suzuki has said that it does not have an immediate plan for Manesar plant reopening announcement. This has put an end to the speculations and is also an indication that the reopening of the Manesar plant is unlikely to happen any time soon.
Manesar plant is closed since July 21 after labor unrest on July 18 resulted in a death of a manager and left 96 others injured. The closure of the plant has affected Maruti badly and the loss incurred is estimated at Rs 75 crore per day. In addition, customers who are not ready to wait for the long waiting period on Maruti cars are likely to purchase cars from other manufacturers which means more loss to Maruti.
Manesar facility consists of 2 plants and produces around 5 lakh cars per year. Most importantly it produces the hot selling Swift and Dzire cars which have a huge backlog. Cumulative bookings for these cars have crossed 1.4 lakhs units and the waiting period is as high as 10 to 12 months. It was expected that Maruti will start manufacturing at Manesar in phases and phase B which produces Swift and Dzire was the one which was likely to start first. That doesn’t seem to be happening now and Maruti has said that they will decide on the date of re-opening only when they are satisfied with the safety of all their employees.
Things are not as bad as they sound though. There isn’t any extensive damage to critical facilities such as the press shop and assembly line and once the decision to start the manufacturing is taken, the component vendors are informed, it will take only 10 days for actual production to commence. Only question that remains is when will that happen?