Maruti to start production with 90% capacity utilisation in Haryana

Maruti Suzuki India Ltd., India's largest car maker will start production at its two factories in Haryana from Monday. The daily production will be at 5,000 units.

The production at Haryana plant was halted for almost two weeks after a fire at Subros Ltd., one of its largest vendors. The production suffered for almost weeks. The plant was also shut down for 1 week owing to maintenance. The production will start with 90 per cent capacity utilisation on Monday. Maruti has built up stock for AC kits which Subros supplied during the week of maintenance. 

Subros manufactures air-conditioning kits for car companies. The factory at Manesar suffered heavy damages due to a fire that was caused by a blast in a moulding machine running on a commercial liquefied petroleum gas (LPG)  cylinder. Subros has manufacturing facility in Noida, Pune , Chennai, Sanand and Manesar. 

Due to the incident at Subros and the unexpected maintenance shutdown, the company has registered a production loss of 58,000 cars. This production loss will push the waiting period for the newly launched models of Maruti Suzuki viz., Vitara Brezza and Baleno. The production loss has come at a time when the demand for Maruti cars is improving owing to new product launches which are highly profitable. 

Maruti is trading at Rs. 4,078 per share, down by Rs. 33.80 or 0.81 per cent on Monday on an intra-day basis. The 52 w high for  Maruti is at 4790.  Over a 1 year period the stock has generated 9 per cent returns. At 4078 the stock is trading just below its 200-DMA  (Daily Moving Average), indicating bearishness in the scrip.