AUTO NEWS ALERT! Suzuki Motorcycle's 'project' to ramp up production gets delayed - KNOW REASON

Suzuki Motorcycle India Pvt Ltd (SMIPL) is delaying its project to ramp up production to 10 lakh units per annum by up to one-and-a-half years because of the ongoing coronavirus pandemic, according to a top company official.

However, the company is optimistic that its sales in the domestic market this fiscal will be "slightly better" than last fiscal when sales had dropped by 23.90 percent compared to 2019-20, as per a report by PTI.

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SMIPL, the wholly-owned two-wheeler arm of Japan's Suzuki Motor Corporation, had shut its plant for three weeks from April 28 due to oxygen supply constraints. The company is now coordinating with group firm Maruti Suzuki to address the issue, particularly those of its critical vendors, having resumed production from May 17.

"Because of the COVID-19, starting from last year our project is slightly delayed. Originally we were expecting more progress in these two years but because of COVID-19 the market hasn't grown as expected... Earlier we had planned to enhance production capacity up to one million in this year but physically it is impossible in terms of number of sales," newly appointed SMIPL Company Head Satoshi Uchida told PTI in an interview.

He further added, "We will be delayed by one year to one-and-a-half years. Three years ago we reached 7 lakh annual capacity. So as per the original plan we were supposed to reach one million (this year). So we have to invest to the current factory to reach one million production level but this year we cannot reach one million."

While asserting that the company is bullish on the Indian market in the mid to long term, he said "in the short term we are obliged to delay current investment schedule".

In 2020-21, SMIPL's production was down 24.87 percent at 6,00,056 units as compared to 7,98,711 units in 2019-20.

In 2020-21, the company had sold 521,474 units in the domestic market, down 23.90 percent from 6,85,219 units sold in 2019-20.

Commenting on the oxygen supply issue, Uchida said the company had to close its factory for three weeks shutdown but has resumed operations since May 17.

"What we experienced was that more than our in-house need of oxygen, which is relatively low, it was more critical in our supply chain in some critical vendors. To that effect, there is some support that has been mobilised...We are now coordinating with Maruti, which is actually supporting the vendors (which incidentally are common to both the companies)," he added.

When asked if the pandemic has also affected the company's new model development, Uchida said, "We cannot delay new model development because it will increase our model development cost. So we are going to go ahead with the original plan. There is no holdback on our product plans because of the COVID-19 situation. All our product plans are on course."