Maruti Suzuki has had a worst time dealing with the labour unrest at its key Manesar plant. It is but obvious that the opportunity loss and crippled production would negatively affect the carmaker’s sales and earnings performance.
While Maruti’s Q2 profits halved to Rs.240 crore in July to September 2011 quarter, down 60% from Rs.598 crore a year ago; its October sales slumped by 53% to 55595 units as compared to 118908 units for the same month last year.
On its performance lag, Maruti statement to its shareholders read as:
"The labour unrest at company’s Manesar plant during October 2011 adversely impacted the production and sales numbers. The company lost production of over 40,000 units in the month."
It needs to be pointed out that the auspicious occasion of Diwali is the most awaited period for the domestic automakers to drive home strong volume and sales growth, backed by positive consumer sentiment. However, Maruti was substantially hit in terms of production roll out of its profitable premium cars such as Swift hatchback and SX4 sedan models.
At the same time, the auto giant found no respite in terms of export volume growth as well. Maruti’s exports volume dipped by 64% to 4137 units. As compared to September 2011 sales of 85595 units, October sales witnessed erosion by 35% to 55595 units.
While sales of SX4 sedan was worst hit by 84% in October; compact car sales for models such as Swift, Ritz and Estilo were slumped by more than half in the festive month of October.