India’s Automotive Component Manufacturers Association (ACMA) is urging Maruti-Suzuki to reopen its shuttered Manesar plant as quickly as possible, with concerns growing supplier inventory levels may be becoming hard to sustain.
The Manesar plant is under lock-out following last week’s extreme violence that saw Maruti’s human resource manager killed, a hundred staff hospitalised and extensive factory damage due to arson.
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Maruti-Suzuki accounts for around 40% of passenger vehicles produced in India and its Manesar plant in the north of the country is a huge customer for ACMA’s 650 members, some 270 are located near to the Delhi plant.
“Our concern is we will not know the period of the lock-out – that leaves us very, very uncertain,” ACMA executive director, Vinnie Mehta, told just-auto from Delhi. “Honestly, the automotive industry and components industry do not enjoy very high margins so we would not have the capability of maintaining inventories.”
Mehta conceded there had been incidents previously in the National Capital Region (NCR) belt, with another worker killed, following lay-offs, but nothing as “gruesome” as the latest violence, which is starting to potentially impact down the Indian supply chain, although no details are yet available as to lay-offs as significant numbers of staff are contract workers.
“What has happened is very unfortunate and we very severely condemn it,” he said. “While there is a loss of production, what is paramount is the safety and security of the people – I understand the administration is taking action.
“We would want them to it as soon as possible so confidence of the industry is reinstated. Honestly, we feel very, very shattered at this juncture, very shocked.”
The ACMA chief underlined the importance of Maruti Suzuki to the country and the Haryana region of north India, insisting the automaker had “redefined the Indian automotive industry,” not just from a manufacturing but also from a consumption perspective.
“It [Maruti] is very significant engine of growth for the automotive sector,” he said. “They have 40% of the whole Indian market.
The Manesar factory assembles Maruti’s top-selling Swift and Dzire models, producing around 1,600 vehicles worth US$12.5m a day, but the shut-down is certain to cause disruption to suppliers, many of whom are located nearby.
