Has strike at Maruti's Manesar plant come at a bad time?

     The recently concluded strike at Maruti Suzuki's Manesar plant has costed the company with production loss of over 1200 cars, most of it were diesel. The revenue loss for the company was estimated to about Rs. 400 crores. Is it just the loss for the company? We think otherwise.


     Since Manesar plant manufacture diesel vehicles there is acute shortage of diesel cars for the company. The booking period is mounting with up to 6 months for the Swift diesel. During the time there is high chance of customers switching over to a different model which is readily available in the market.


     The production loss leading to mounding of booking period has forced to postpone launch the new Swift. So in the mean time if Toyota which has launched a petrol Etios Liva decides to launch a diesel one, it would be hard for Maruti to compete against a car which has a strong quality image.


     Also launching a new Swift means, Maruti should stop the model or launch it along with the current model with a higher price. With the segment hotting up, there could be a price correction among competitor models making the new Swift not so value for money.


     Strategically we feel Maruti Suzuki is in its one of the most challenging period. The company has not yet settled the labour issues properly. New launches are giving stiff competition in every category. But by going through the history, it is most likely that Maruti will withstand the storm, at least to some extent.


     Anyways we at Automobile Planet are happy because it is the customers who are reaping the benefits. 



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