Maruti Suzuki: Big boss to take stock of Manesar

Maruti Suzuki India's (MSIL) Manesar woes could end next week with the high profile visit of Suzuki Motor Corporation Chairman and Chief Executive Osamu Suzuki visiting the country.

Suzuki Motor Corporation is the parent company of MSIL. Osamu is likely to assess the situation at the Manesar plant and finalise the site of next Maruti facility which will be set up in Gujarat.

According to sources, Osamu - who will land on August 22 - will assess the loss of the Manesar plant since July 18, when workers killed one manager and injured hundred other employees.

"He will stay for nearly a week. He will visit Gujarat, where he will meet chief minister Narendra Modi and finalise the site for the new facility," a senior executive from MSIL has told MAIL TODAY.

The company will set up its next plant in Gujarat. In his trip to Japan last month, Modi had already assured Osamu of support for setting up the plant.



"He [Osamu] will stay till August 28 to attend the annual general meeting of the company. So far, there is no plan to visit the Manesar factory. He may take a call after getting feedback," the executive added.

Osamu's trip is significant as the company is suffering production loss due to the current shutdown of Manesar unit.

The plant, which produces MSIL's best-selling Swift hatchback and has annual capacity of 5.5 lakh vehicles, is suffering daily production loss of about 1,700 cars.

The company is expected to restart production at its Manesar factory on August 25, according to the Nikkei business daily. It will also prepare assessment of the total loss of the company due to the shutdown in terms of infrastructure damage and production loss which will be presented to Osamu.

Two phone calls to the plant's spokesman went unanswered.

"This announcement did not come from us; so, we are unable to comment on its validity," said Ei Mochizuki, spokesman for Suzuki Motor Corporation.

According to analysts, a one-month shutdown would cut Suzuki Motor Corporation's operating profit by around 6 billion, equal to five per cent of the Japanese car maker's 120 billion forecast for the year to end-March 2013.

"However, if the company can recoup production after reopening the plant, losses could diminish on a fiscal year basis," Goldman Sachs said in a report.

With inputs from Mail Today