Maruti plans to control price to curb rising input cost

The component cost is increasing which is making it difficult for the car companies to keep the efficiency level intact. The auto biggies such as Maruti Suzuki India revealed that due to increasing margins of the input cost the profit margins are shrinking, leading them to account for counter measurements.

The companies are facing pressure despite the recent cost hike and observed nearly 20 per cent decline in YoY net profit in the last quarter. S Maitra, managing executive officer (supply chain), at Maruti Suzuki said that the pressure is worrisome as all the component prices are accelerating such as rubber, steel etc. Mr Maitra said that Maruti took measures, focusing on easing out some of the effects to the dearer cost inputs. Maruti has been taking programmes with its 250 odd suppliers and inside its own units. The programme such as 'wuda' a Japanese term is used for wastage which ensures lean production. Mr Maitra said that the company used 'wuda' to curb the wastage.

Maruti is also running a programme 'gemba' which handholds suppliers for making them more efficient. In two months time, the company takes around seven to eight suppliers and teaches them about the lean production processes. Then the company's takes up four to five efficiency projects in the factories to increase the output. The Indian auto czars are also working hard towards the improvement of the same.

The company is also running a programme which will help in reducing wastage in which less raw material will be required for developing the content. It also runs a programme which was known as '1 component 1 gram' in which suppliers and others were speculated to decrease weight of the parts by atleast 1 gram. However, Maruti increased its prices by 2.4 per cent for all of its car models to counter to the rising input cost.

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