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Maruti Suzuki faces heavy revenue loss

India’s largest car manufacturing company Maruti Suzuki India (MSI) has faced loss of around Rs.540 crore, due to workers' strike at the Manesar plant, according to the company. A company official said that the company has produced 10,000 units, thus far, in September, at its Manesar plant. However, the normal production level is of 22,500 units per month. According to the company official, the company lost about Rs. 3 Lacs per unit of car that wasn't manufactured during this period.

The labour unrest has resulted in about 12,500 units less produced in September, thus accounting for loss of about Rs.360 crore. The company faced revenue loss of Rs. 180 crore, last month too, because the workers slowed down the production level deliberately. On August 24, the total production was taken down to 96 units as compared to 900 units of average daily production.

The automobile company's profit is expected to go down by Rs. 40 crore, due to the labour unrest. The volume of production has gone down significantly, and thus the margin, which was last year 10.5 percent, should fall. The appreciating Japanese currency Yen, may however, save the company from falling profit margins.

The labour unrest at the Manesar plant started when Maruti Suzuki's management presented the workers with the Good Conduct Bond and prevented them from entering the premises of the plant before signing it. The workers refused to sign the bond and went on strike, thus forcing company to halt the production at the plant. The dealers stopped bookings of Maruti Swift in the wake of management and worker standoff at Manesar and halted production. The bookings of Maruti Swift, company's highest selling car, have reached 108,000 units.