Millennium Post

Low demand forces Mahindras to stop production for up to 8 days

Auto major Mahindra & Mahindra on Thursday said it will stop production at its automotive plants for up to eight days this month to cut output in the wake of low demand in the market.

‘The company as part of aligning its production with sales requirements, would be observing 'no production days' at its automotive plants for a period ranging from 1 to 8 days during the remaining period of July, 2013,’ Mahindra & Mahindra said in a filing to the BSE.

The company further said that one of its wholly-owned subsidiaries -- Mahindra Vehicle Manufacturers Ltd -- would also be observing 'no production days' for about eight days during the remaining period of July, 2013 at its plant situated at Chakan.

‘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 company said.

Apart from the Chakan unit, the company manufactures its automobiles at plants including Nashik and Haridwar.In June this year, domestic sales of M&M, which is the largest utility vehicle maker in the country, stood at 36,207 units as against 38,951 units in the same month last year, down 7.04 per cent.

The increase in excise duty on sports utility vehicles to 30 per cent from earlier 27 per cent in this year's budget has resulted in increased prices of M&M's best selling models including XUV500, Scorpio, Xylo and Bolero, which has hurt its sales.

Car sales in India appear to be heading for a record eighth consecutive month of decline with major firms, including MSI, Tata Motors, Toyota, and General Motors, reporting a drop in June as the economic slowdown and low consumer sentiments have continued to affect demand.The overall official sales figures for June are yet to be released by the Society of Indian Automobile Manufacturers (SIAM). Car sales had fallen for a record seventh consecutive month in May, with a decline of 12.26 per cent at 1,43,216 units as against 1,63,222 units in the same month of 2012.

Earlier this week, Maruti Suzuki is understood to have asked 200 contract workers to go on indefinite leave following a cut in diesel engine production at its Manesar plant due to low demand.
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