Suzuki Motorcycle's Project To Ramp Up Production Deferred By 18 Months Due To COVID-19

Suzuki Motorcycle India's project to ramp up production to 10 lakh units per annum is deferred by up to one-and-a-half years. As reported by PTI, a top company official confirmed that this project has been delayed because of the ongoing coronavirus pandemic. The company had planned to enhance production capacity up to one million this year. However, the two-wheeler manufacturer is optimistic that its domestic market sales during this fiscal will be slightly better than the previous fiscal when sales had dipped by over 23 per cent compared to 2019-20. Moreover, Suzuki India had temporarily halted production at its plant for three weeks from April 28 due to oxygen supply constraints. The company resumed production from May 17, 2021.

Also Read: COVID-19: Suzuki India Extends Free Service, Warranty Till July 15

Suzuki believes its sales in the domestic market this fiscal will be slightly better than previous fiscal

The recently appointed Company Head Satoshi Uchida said to PTI, "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."

He further said, "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 in the current factory to reach one million production level but this year we cannot reach one million."

Satoshi Uchida was responding to a query on how the pandemic has impacted the company's future investment plans in India. He also said that the company is bullish on the Indian market in the mid to long term. As for the short term, the company is obliged to delay the current investment schedule. However, he did not elaborate on the investment for the capacity ramp-up to 10 lakh units.

On the current market scenario and sales prospects for the ongoing fiscal, Devashish Handa, SMIPL Vice-President, Sales, Marketing and After Sales said, "This financial year we are looking forward to doing better than what we did last year, provided the pandemic situation is also not as severe as what we are going through right now."

In 2020-21, Suzuki India's production dropped by 24.87 per cent at 6 lakh units as compared to 7.98 lakh units in 2019-20.

Also Read: Suzuki Motorcycle India Appoints Satoshi Uchida As Company Head​

In 2020-21, Suzuki Motorcycle India's production dropped by over 24 per cent at 6,00,056 units as compared to 7,98,711 units in 2019-20. The company sold 521,474 units in 2020-21 witnessing a fall of 23.90 per cent in comparison to 6,85,219 units sold in 2019-20.

He further added, "Demand side is not much of an issue but it has more to do with the disruptions in the supply chain because of the lockdowns. Also with the oxygen issue, the company has had to make whatever it can. We always had a situation with the order book higher than what we could supply. It was more to do with supply limitation. We could not make as much as the demand."

When asked if the COVID-19 pandemic has 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."