Maruti Suzuki Hikes Worker’s Wages Sharply– Will It Affect Maruti’s Profits?


Maruti Suzuki , the country’s largest car maker has announced a sharp rise in the wages of its workers at the Gurgaon Plant. The wage increase to the tune of Rs. 14,000 to Rs. 22,000 based on the experience and seniority is one of the highest ever wage increase carried out by the company in its 30 year operation period. The wage hike is close to 75% and with a settlement period of 3 years starting this financial year. With this wage hike, the Maruti Suzuki workers will become one of the highest paid in the manufacturing sector of the country.

Maruti Suzuki Workers Wages Increased

Speaking on the occasion, the chairman of the company, Mr. R.C Bhargava said to the reporters that the increase in wages of its workers will not have any significant impact on the profit margin of the company. He said, “We are increasing the salaries of our workers and the same will have no significant impact on our bottom-line because the wage cost will stand around 2.6% as previously, so there are no chances of any effect.” He also added that the company’s total cost of wages ranging from executive level workers to managing director stands at a little over 2% of its total sales.

Maruti Suzuki Workers Wages Increased

The current wage hike decision comes into immediate effect at its Gurgaon plant. However, with a serious outrage taking place at its Manesar plant in the recent past and the dissolving of the Manesar Workers Union, the company is still working on the final agreement for the Manesar plant. Regarding the wage hike at Manesar, Mr. Bhargava commented,

We’ve executed a strategy through which existing workers can involve and discuss their thoughts about settling wages. But at the same time we want that wages need to be equal in both factories and must not differ”.

This hike in wages will not only improve the financial condition of the workers, but will also help attract more workforce to Maruti. This will make it easy for Maruti Suzuki to hire more skilled workers and retain them improving the efficiency of the workplace. Stay tuned to Car Blog India for more updates.