Maruti cuts diesel engine output, 200 contract staff hit - Moneycontrol.com

Another company, in Motown after Bajaj Auto and Tata Motors is in trouble as  Maruti Suzuki has decided to shut down third shift at its diesel engine plant in Manesar and has asked 200 contract workers to go on indefinite leave, reports CNBC-TV18 quoting sources. Severe shortfall in demand has forced the auto major to cut production. This is the first large scale downsizing by Maruti since violence and strike at its Manesar plant last year. Suzuki Powertrain India Ltd (SPIL), a wholly owned subsidiary of Maruti runs the diesel engine plant at Manesar. The total capacity of this plant is 3,00,000 diesel engine per annum. According to sources overall production at SPIL is down over 30 percent since last two months. This stems from last month's announcement by the company that they will shut down their diesel car plant at Manesar for a day. The slowdown is clearly not just restricted to the petrol segment and is also spreading to the diesel vehicle segment which last year gave some respectability to the overall automobile sales. Also read: Jaguar Land Rover says prepared if DHL workers go on strike Sources from Maruti further informed that market sentiments are very low and the company has no option but to ask workers to go on leave to align production with demand. The company may not even manage to meet its 5 percent growth target due to challenging economy environment. The largest passenger car maker in the country had plans to increase its diesel car production to 4.65 lakh unit this year from 4 lakh units last year, however considering the current demand crisis the company is likely to miss this forecast. Auto companies have been reporting lower monthly sales numbers since last few months. Higher interest rate and lower economy growth seems to have delayed consumers' car purchasing decision. In addition all hopes of rate cut by Reserve Bank of India are doomed now as rupee has hit a fresh all time low of 61 against dollar. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHLNItOTDQ-wLdMPtqtuEke5kvJGQ&url=http://www.moneycontrol.com/news/business/maruti-cuts-diesel-engine-output-200-contract-staff-hit_913439.html

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