Lack of demand drives automakers to shift production into lower gears
Hit by a demand slump, automakers are slowing down. With the Reserve Bank of India not having lowered interest rates even marginally, high petrol prices and the threat of diesel vehilces attracting an additional impost of between, Rs1.7 lakh to Rs2.5 lakh, automakers have started cuttong down production.
In some cases the auto manufacturers have even started to curtail production of certain variants or models altogether. Bangalore-based Toyota Kirloskar Motor has stopped production of all its petrol cars. Pune-based Fiat is said to be considering shutting down its plant for a few days next month.
While the sale of petrol models on the back of a steep hike in petrol already down, the talk of the new levy on diesel passenger vehicles has manufacturers worried.
Mahindra & Mahindra president, Pawan Goenka, who is also the president of the automobile manufacturer's body, Society of Indian Automobile Manufacturers (SIAM), said that the industry is already facing a tough time with the slump in demand for petrol passenger vehicles, and the additional tax on diesel passenger vehicles will adversely affect the industry. He added that SIAM was not consulted on the issue of the proposed tax on diesel passenger vehicles.
Goenka felt that such a plan should not be implemented, as it would impact the auto industry negatively.