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Maruti says strike at plant ends; Sept sales down 21%

Maruti says strike at plant ends; Sept sales down 21%
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First Published: Sat, Oct 01 2011. 05 37 PM IST

Customers look at the Maruti Suzuki Swift car at a showroom in New Delhi. Photo: Bloomberg
Customers look at the Maruti Suzuki Swift car at a showroom in New Delhi. Photo: Bloomberg
Updated: Sat, Oct 01 2011. 05 37 PM IST
NEW DELHI: Maruti Suzuki, India’s top car maker, said a month-long strike at one of its plants that cost the company about $135 million in lost output ended on Saturday, after workers agreed to sign discipline agreements.
Customers look at the Maruti Suzuki Swift car at a showroom in New Delhi. Photo: Bloomberg
Maruti, 54.2% owned by Japan’s Suzuki Motor , also said its vehicle sales in September fell about 21% from a year earlier as the labour unrest disrupted production.
Workers at Maruti’s Manesar factory in the northern Haryana state walked out on 29 Aug after the company demanded they sign a “good conduct bond”, saying some had engaged in sabotage.
The company said in a statement the strike had been resolved and the workers agreed to sign a “good conduct bond”. The striking workers will resume work on 3 Oct, the company said.
A Maruti spokesman said the company suffered a production loss of about 22,000 cars, or an estimated loss of Rs 660 crore ($ 135 million), over the strike period.
In June, about 800 workers went on a 13-day strike at the plant, which makes cars including the popular Swift model, crippling production and leading to more than $90 million in lost output.
Maruti will not pay the striking workers for the period of the strike, it said, adding the 44 employees against whom it had taken disciplinary action would not be taken back.
Representatives of the workers were not available for comment.
The carmaker had said it would not compromise with the workers who were refusing to sign the discipline agreement, and was steadily hiring new employees.
Maruti and its rivals are battling a slowdown in car sales in Asia’s third-largest economy as higher interest rates and fuel costs hit demand, after record growth last fiscal year.
Industry car sales fell in July for the first time in nearly three years and continued the decline in August. Sales are expected to grow by just 10 to 12% this fiscal year to next March, down from an earlier forecast of 16 to 18% and compared with a 30% jump in 2010/11.
Tata Motors, which makes both commercial vehicles and cars, including the ultra-cheap Nano small car, said its September sales rose 22% from a year earlier. Nano sales, however, were down 47%, after plunging 85% in August.
Mahindra & Mahindra, India’s largest utility vehicles and tractor maker, reported a 25% growth in September sales from a year earlier and said the month’s sales were a record for the company.
Maruti shares have fallen nearly 24% in 2011, while Tata shares have lost more than 40%, both underperforming a nearly 20% fall in the broader Mumbai market. Mahindra shares are up 3.4% this year.
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First Published: Sat, Oct 01 2011. 05 37 PM IST
More Topics: Auto | Sales | Maruti Suzuki | Manesar | Swift |