No wage and labor cuts: Maruti Suzuki
NEW DELHI - The Largest Auto Manufacturer in the Country Maruti Suzuki He said Wednesday that business and new launch plans will be affected by disruptions due to the pandemic, although he made clear that the company has no plans to cut jobs or wages as a countermeasure.
The Maruti president said schedules are affected by restrictions around the coronavirus, especially as operations at many providers have been impacted due to a variety of measures, including some falls in containment zones or red/prohibited areas.
We have no plans to cut wages or jobs, Bhargava said when asked if any such measures were contemplated. The company, like all other major automakers, was unable to supply any new vehicles to dealers in the month of April, as the nationwide blockade over coronavirus concerns meant that everything was closed, from the factories. even retailers.
Maruti resumed production at its Manesar factory on Tuesday and plans to start the Gurugram factory starting next week. However, it is still unclear when the Gujarat plant, owned by its parent, Suzuki, will begin operating.
Bhargava said there are still active cases in the villages around the Gujarat facilities, and there are problems related to the movement of labor, government component permits and supplies. There are uncertainties about production in Gujarat.
When asked about his sales outlook and when normalcy would return to the market, the president of Maruti said that the situation remains fluid and that there is still no clarity on the matter. The market is uncertain. No one knows how the market will behave.
Bhargava said that a third of the company's dealerships have been opened so far, as closing restrictions began to apply as of May 4. Of this, 60% is in rural areas. We also hope to open approximately 2,000 additional dealerships, but it will take a little longer.
Asked whether the government should cut GST rates on automobiles to increase affordability and spur demand, he said the relief should be extended, but after some time. "As we stand today, the production volumes are going to be low over the next 1-2 months. So, it (GST cut) doesn’t make any sense now… GST becomes relevant only when production can be increased to higher levels. The government and industry have to look at it."
The company also decided to cut capital expenditures for the second consecutive year, given uncertain market conditions. Capital expenditure was reduced by 16%, or Rs 550 crore, for FY21 over last year's capital expenditure of Rs 3,248 crore. Capital spending for this prosecutor has been set at Rs 2.7 billion rupees.