Subros fire puts brakes on Maruti's production

The country’s largest car maker, Maruti Suzuki, suspended production at both its plants on Monday afternoon as the supply of air-conditioning systems from Subros’ Manesar unit halted.

A fire on Sunday damaged the Subros plant and resumption of operations may take a few months.

Maruti is looking at other ways to source air-conditioning units. The production loss will affect Maruti’s sales in May.

“Subros and Maruti Suzuki are assessing the extent of damage to essential equipment. We are also examining options of supply of components from other facilities. Production will resume as soon as components become available,” Maruti said in a statement.

Subros, which has about 40 per cent market share in the vehicle air-conditioning business, also has plants in Noida, Chennai, Pune and Sanand. Maruti sources some air-conditioning systems from Sanden Vikas and Denso.

Subros sells approximately 1 million AC systems to car makers in a year with Maruti being its biggest client. Other clients include Mahindra & Mahindra, Tata Motors and Nissan-Renault. Supply to buyers other than Maruti is mostly from Subros’ other plants.

Maruti produces almost 5,000 vehicles a day between its two plants- Gurgaon and Manesar- in Haryana. At the BSE, Maruti's stock ended the day at Rs 4,073.15, down 1.65 per cent from the previous trading day. The BSE Sensex ended in the green with addition of 72 points. In February, Maruti had lost two days of production or about 10,000 units, due to the component supply disruption created by the Jat agitation in various parts of Haryana. The company was forced to shut operations at both its plants - Gurgaon and Manesar - in Haryana.

The stock price of Subros, which supplies air conditioning system to Maruti ended Monday's trading with a 3.87 per cent decline at the BSE. Subros sells approximately one million AC systems to car makers in a year with Maruti being its biggest buyer. Other clients include M&M, Tata Motors, Nissan- Renault. Suppy to buyers other than Maruti is mostly met from other plants.

Subros said in a statement to BSE on Monday that there was no causality or major injury due to the fire. "The fire was controlled, however it has severely impacted the building, stocks and plant and machinery. The Company has initiated steps towards re-functioning of the Manesar plant at the earliest and steps are being taken to service the customer requirement from our other plants at Noida, Pune and Chennai," it said.


Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel