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Suzuki to restrict production at Gujarat plant after sales fall, says report

Suzuki to restrict production at Gujarat plant after sales fall, says report

Suzuki to restrict production at Gujarat plant after sales fall, says report
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By CNBC-TV18 Jul 24, 2019 8:46:28 AM IST (Published)

Suzuki Motor Corp, the parent company of Maruti Suzuki India Ltd., is planning to suspend a planned doubling of vehicle manufacturing capacity in its Gujarat plant amid a slowdown in the auto sector in the country, Mint reported, citing people aware of the development.

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The move comes after Maruti’s local sales fell 19 percent in the June quarter. Overall passenger vehicle sales in the country have been hit for about a year due to volatile fuel prices, high loan rates and a slowdown in the economy.
The company will restrict its capacity to 7,50,000 cars per year, instead of 15,00,000 vehicles a year as planned earlier, according to the Mint sources.
Unavailability of skilled manpower and inadequate infrastructure in Gujarat are also said to be the reasons behind the company's decision to restrict the production, sources told the paper on the condition of anonymity.
“The infrastructure around the place where Suzuki built its plant has not developed and getting skilled labour is also a challenge in that part of the country. Also, the overall cost of operations is much higher since Suzuki doesn’t have its entire vendor base there," a source was quoted as saying in the report.
The Gujarat plant is the first direct investment by the Japanese company in India. It is owned by Suzuki Motor Gujarat, a unit of Suzuki Motor.
When contacted by the paper, a spokesperson of the Maruti declined to comment on the development.
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