Mahindra to stop vehicle plants for three days in January
18 January 2014
In another reflection of the slump in India's car market, the country's biggest utility vehicle manufacturer Mahindra & Mahindra today said it would stop production at its plants for up to three days in this month to align output with sales requirements.
Most carmakers in India, including market leader Maruti Suzuki, have been cutting production days (and saving on wages) for several months now, as inventories pile up amid slack demand.
"The management does not envisage any adverse impact on availability of vehicles in the market due to adequacy of vehicle stocks to serve the market requirements," the Mumbai-based M&M said in a statement to the Bombay Stock Exchange.
India's auto industry is facing a second year of falling sales as high interest rates and fuel costs keep a lid on consumer spending in a slowing economy.
Car sales declined by 4.52 per cent to 1,32,561 units in December 2013 compared with 1,38,835 units sold in December 2012. Moreover, passenger car sales declined for the first time in 11 years during 2013, with carmakers as a whole showing a 9.6 per cent over the previous calendar year, data from the Society of Indian Automobile Manufacturers (SIAM) released earlier this week showed.
Mahindra Vehicle Manufacturers, a wholly owned subsidiary, would also be observing 'no production days' at its Chakan plant for the same number of days, M&M said.
Apart from shrinking purchasing power that has stagnated carmakers, the utility vehicle market has been particularly hit by the steadily rising price of diesel and increasing levels of central and state levies.