Automakers Cut Production To Align With Tapering Market Demand
In a regulatory filing, M&M said it would be observing ‘no production days’ in various plants for 8-14 days in second quarter.
Home-grown auto majors Tata Motors Ltd. and Mahindra & Mahindra Ltd. are suspending automobile manufacturing in order to adjust production with market demand.
M&M on Friday said it will be suspending production for eight-14 days in the ongoing quarter while Tata Motors also confirmed taking steps to align manufacturing with tapering demand.
In a regulatory filing, M&M said it would be observing 'no production days' in various plants for eight-14 days during the second quarter of 2019-20.
When contacted, a Tata Motors spokesperson said, "as indicated earlier, external environment remains challenging, leading to demand contraction. We have aligned our production to actual demand and adjusted the number of shifts and contractual manpower".
The companies are announcing production suspension at a time when the domestic auto industry has been going through one of the longest sales slumps.
In April-July, M&M's total domestic vehicles sales dipped 8 percent to 1.62 lakh units as against 1.75 lakh units in the year-ago period.
Overall sales of the company, including exports, were also down 8 percent during the period at 1.71 lakh units as compared to 1.87 lakh units in April-July period of the last fiscal.
On Thursday, auto components maker Jamna Auto said it may suspend production at all its manufacturing facilities this month due to poor demand from customers.
The company is a leading manufacturer of tapered leaf and parabolic springs for commercial vehicles and caters to companies like General Motors Co, Toyota Motor Corp and Tata Motors.
On Wednesday, Maruti Suzuki India said it has cut its production in July —for sixth month in a row —by 25.15 percent. Similarly, auto components major Bosch said it would temporarily stop production at its two plants separately this month for a total of 13 days to "avoid unnecessary build-up of inventory.
The auto industry has been going on a prolonged slump. Passenger vehicles segment has been the worst hit with sales continuing to decline for almost a year now.
According to SIAM data, vehicle wholesale across all categories declined 12.35 percent to 60.85 lakh units in April-June 2019 against 69.42 lakh units in the same period of last year.