MUMBAI: Maruti Suzuki India is decentralising its plants in Haryana and Gujarat, treating them as strategic business units (SBUs), in a transformative step aimed at driving internal competition and fostering quicker decision making, said people aware of the plans.
In a significant increase in responsibilities, plant heads would now oversee all facets of plant functioning, extending beyond just production.
Overall, the country's largest carmaker would have three SBUs with the first combining its plants in Gurugram and Manesar. The second SBU would be Maruti's Hansalpur facility in Gujarat, with the third being Kharakhoda, Haryana. SBU heads would be able to take independent calls on critical functions like production, safety quality and industrial relations with lesser involvement of the central office, the people said.
Treating each manufacturing unit as an SBU is aimed at pushing internal competition among the plants to make them more efficient in cost, reliability and quality, said an industry analyst.
"Whichever plant is most cost efficient and reliable gets a higher share of business in this model. Automobiles being a design-driven, process-oriented business, cost efficiency is the only parameter to adjudge a unit. Rest are all standardised and driven centrally," the analyst said.
The manufacturing strategy reshuffle is among a slew of changes being implemented at the local arm of Suzuki Motor Corp from April 1, as it prepares to double production to 4 million units under Maruti 3.0-as referred to internally-by 2030, the people said.
"The idea is to have an appropriate organisational structure taking into consideration the growing scale and complexities of the business which comes with larger volumes, multi-locational plants and multiple powertrains," one of the persons said.
A Maruti spokesperson did not respond to email queries.
RC Bhargava, chairman, Maruti Suzuki India first emphasised upon the need to restructure the organisation at the company's annual general meeting in August 2023. Maruti plans to invest about Rs 45,000 crore to double annual production capacity to four million units.
The company has also rejigged its executive committee that will have an oversight on matters of strategic importance. The eight-member committee will now have an almost equal representation of Japanese and Indian executives. This committee comprises heads of various critical verticals from finance, production and engineering and corporate planning, as per an internal note circulated by the company and reviewed by ET.
In a significant increase in responsibilities, plant heads would now oversee all facets of plant functioning, extending beyond just production.
Overall, the country's largest carmaker would have three SBUs with the first combining its plants in Gurugram and Manesar. The second SBU would be Maruti's Hansalpur facility in Gujarat, with the third being Kharakhoda, Haryana. SBU heads would be able to take independent calls on critical functions like production, safety quality and industrial relations with lesser involvement of the central office, the people said.
Treating each manufacturing unit as an SBU is aimed at pushing internal competition among the plants to make them more efficient in cost, reliability and quality, said an industry analyst.
"Whichever plant is most cost efficient and reliable gets a higher share of business in this model. Automobiles being a design-driven, process-oriented business, cost efficiency is the only parameter to adjudge a unit. Rest are all standardised and driven centrally," the analyst said.
The manufacturing strategy reshuffle is among a slew of changes being implemented at the local arm of Suzuki Motor Corp from April 1, as it prepares to double production to 4 million units under Maruti 3.0-as referred to internally-by 2030, the people said.
"The idea is to have an appropriate organisational structure taking into consideration the growing scale and complexities of the business which comes with larger volumes, multi-locational plants and multiple powertrains," one of the persons said.
A Maruti spokesperson did not respond to email queries.
RC Bhargava, chairman, Maruti Suzuki India first emphasised upon the need to restructure the organisation at the company's annual general meeting in August 2023. Maruti plans to invest about Rs 45,000 crore to double annual production capacity to four million units.
The company has also rejigged its executive committee that will have an oversight on matters of strategic importance. The eight-member committee will now have an almost equal representation of Japanese and Indian executives. This committee comprises heads of various critical verticals from finance, production and engineering and corporate planning, as per an internal note circulated by the company and reviewed by ET.
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