The Telegraph
Since 1st March, 1999
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Truck tiff puts Maruti off-key

New Delhi, April 16: Maruti Udyog (MUL), a unit of Japan’s Suzuki Motor Corp, said today the firm may have to temporarily close its plant due to a nation-wide strike by truckers.

The truckers are on strike from Monday to back demands for stable diesel price increases, exclusion from a planned consumption tax and minimum freight rates.

“I think after a couple of days, we’ll have to close down (the plant) because our inventories are low,” said Jagdish Khattar, managing director of Maruti Udyog (MUL). “If we don’t get new supplies, we won’t be able to manufacture.”

“We work on a very limited inventory level and production has been affected due to the strike,” he said, adding the firm has decided not to increase prices of its models.

Maruti’s plant is located on the outskirts of New Delhi and has the capacity to produce 3,50,000 vehicles annually. It sources manufacturing inputs from different parts of the country, transported mainly by road. It makes 11 models in India including cars, multi-purpose and utility vehicles.

The firm today launched the 2.7-litre Grand Vitara XL-7, a sports utility vehicle with V6 engine and a sticker price of Rs 15-16 lakh.

Asked if the firm has plans to locally manufacture the Vitara since it currently imports the model, Khattar replied in the negative. “Unless, you sell around 1,000 units a month, local production does not make business sense.”

But Maruti officials expect to sell more than 200-300 units of the Vitara a year. “We have received encouraging demand and sales might be higher than our projections. We are ready to meet the expected spike in demand,” they told The Telegraph.

MUL, which has a share of 54 per cent in the domestic car market, has reported flat sales for the financial year to March 2003. Sales went up marginally by 0.4 per cent to 2,75,031 units in 2002-03 from 2,73,884 units in the previous year.

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