India’s biggest automobile manufacturer Maruti Suzuki recently resumed operations at its Manesar facility after more than 40 days, and is reportedly planning to restart more production lines at its Haryana factories over the next seven days. However, shortage of manpower due to movement restrictions has become a challenge for the company.
Maruti Suzuki’s Chairman, R C Bhargava said, “There are uncertainties about production because manpower movement is still not free, there are problems, permits are needed to move around, one needs permits to move from one district to another.”
As of now, only one of the company’s production lines is operational in Manesar which started rolling out vehicles on May 12. Alto, Swift, Dzire, S-Presso, Ertiga and Baleno are made at the Manesar plant.
Since the government imposed a nationwide lockdown, migrant workers across the country have been returning to their homes creating a shortage of manpower across industries. While Maruti Suzuki is directly not affected by the mass exodus of migrant workers, its vendors and suppliers are. Several component manufacturing factories surrounding the automotive factories employed workers as contract labourers.
Explaining the problem faced by vendors, Bhargava added, “ Much of their manpower has run away to the villages and it is not so easy to get them back because there is no communication. Many smaller vendors have financial problems. These are the areas where the supply chain is running into problems.”
“To get to 100 percent components supply means that all vendors have to work and work without interruption. Unfortunately for us a lot of our vendors and their vendors (tier 2 and 3) are located in areas that do not permit industrial activity because they are in containment zones. There is no problem with the worker not wanting to come whether it is temporary or otherwise. The problem is that the regulatory environment makes their movement difficult,” added Bhargava.
Recently in April, almost every automobile manufacturer in the country recorded zero sales. Also, due to increasing concerns of catching the virus at showrooms, companies have now started online ordering of vehicles. Fiat’s Jeep was the first company to start this initiative in India across all models of the brand.
Bhargava said that he expects the market to recover by the time of the festive season. “ Definitely during the festival season, the demand will be higher than what the industry will be able to produce. By that time we will be able to fine tune on how to work with the new safety and distancing norms,” he said.
Due to the decline in demand and sales of the vehicles, another concern of salary and job cuts has risen. Commenting on the possibility, Bhargava said, “We have no plans to reduce salaries or jobs.”
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