NEW DELHI: Suzuki Motorcycle India Pvt Ltd (SMIPL), the 100% two-wheeler arm of the Japanese company Suzuki Motor Corporation, is delaying its “ plan ” to increase production to 10 lakh per year until one and one-half a year because of the ongoing coronavirus pandemic, according to a senior company official.
The company, however, is optimistic that its domestic sales this fiscal year will be “slightly better” than last fiscal year, when sales fell 23.90 percent from 2019-20.
SMIPL, which had closed its plant for three weeks from April 28 due to oxygen supply constraints, is now coordinating with group company Maruti Suzuki to resolve the issue, especially those of its critical suppliers, having resumed production from May 17.
“Due to COVID-19, from last year our project is slightly delayed. Originally we expected more progress in these two years, but due to COVID-19 the market has not grown as expected … Earlier we had planned to increase production capacity up to one million this year, but physically it is impossible in terms of number of sales ”, said Satoshi Uchida , new head of the company SMIPL, in an interview.
He added: “We will be delayed from a year to a year and a half. Three years ago we reached the annual capacity of 7 lakh. So according to the original plan, we were supposed to reach a million (this year ). So we have to invest in the current factory to reach a production level of one million, but this year we cannot reach one million. ”
Uchida was responding to a question about the impact of the pandemic on the company’s future investment plans in India.
While saying the company is optimistic about the Indian market in the medium to long term, he said “in the short term we are forced to delay the current investment schedule”.
However, he did not specify the investment for the ramp-up of 10 lakh units.
In 2020-2021, SMIPL’s production was down 24.87% to 600,056 units compared to 7.98711 units in 2019-20.
Considering the current market situation and the sales outlook for the current fiscal year, Devashish Handa, Vice President of Sales, Marketing and Service, SMIPL, said, “We are looking forward to this fiscal year. to do better than what we did last year, provided that the pandemic The situation is not as serious as the one we are going through now. ”
In 2020-2021, SMIPL sold 521,474 units in the domestic market, down 23.90% from 685,219 units sold in 2019-2020.
The demand side isn’t much of an issue, but it has more to do with supply chain disruptions due to lockdowns. Still with the oxygen issue, the company had to do all it could, he added.
“We always had a situation with a higher order book than we could supply. It was more to do with limiting supply. We couldn’t do as much as demand,” Handa said.
Commenting on the problem with the oxygen supply, Uchida said the company had to shut down its plant for three weeks, but had resumed operations on May 17.
“What we found was that more than our internal oxygen requirement, which is relatively low, it was more critical in our supply chain at some critical suppliers. To this end, there is a certain support that has been mobilized … We are now in coordination with Maruti, which in fact supports the suppliers (who are, moreover, common to the two companies) ”, he added. .
When asked if the pandemic had also affected the development of the new business model, Uchida replied in the negative.
“We cannot delay the development of new models because this will increase the cost of developing our models. So we’ll go ahead with the original plan. There is no holdback on our product plans due to the COVID-19 situation. All of our product plans are in progress. of course, ”he says.