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Maruti Udyog launches employee separation plan

India's largest car maker Maruti Udyog Ltd, a venture between Japan's Suzuki Motor Corp and the Indian government, has launched a scheme to cut its workforce as it strives to break out of the red this year, a company spokesman said on Tuesday.

"It (a voluntary retirement scheme) was notified yesterday and will be open for a month," the official said.

The scheme is open to all employees who have served the company for at least 15 years, he said, but declined to give details on what its target was or how much it would spend on the exercise.

The Business Standard newspaper, quoting unnamed sources, said the company expects to downsize its workforce by 20 per cent at a cost of Rs 600 million to Rs 700 million.

Maruti, in which Suzuki and the Indian government own 50 per cent each, employs about 5,700 people, of which 4,500 work on the shopfloor at its nearly 500,000-a-year car plant on the outskirts of Delhi.

The automaker has a dominating 58 per cent share of the country's car market, but was hit last year by sliding sales and higher costs.

A combination of adverse state taxes, higher costs and bruising price cuts pushed Maruti to an unaudited net loss of Rs 2.53 billion in the past year ended in March from a profit of Rs 3.3 billion in the previous year.

Its car sales during April to August in the current year grew 10.3 per cent, after falling 13.7 per cent in 2000-01.

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