Maruti Suzuki settles labor dispute; sales down by 53%

Maruti Suzuki was able to settle its two-month old labor problem in October and the company sold 55,595 cars in the same month. Labor unrest cost India’s top carmaker approximately US$500 million in lost production. The labor problems compounded a demand slowdown in Asia’s third largest economy, which resulted in a 53.2% decrease in sales compared to last year. The company’s market share shrunk to 40% from 50% a year ago. High interest rates and the rising costs of vehicles and fuels have deterred potential buyers but Maruti’s competitors, Tata Motors and Mahindra & Mahindra benefited from Maruti’s problems. Tata Motors’ sales rose by 22% in September, and its market share grew to 16.4 % compared to 15% last year. (November 1, 2011)