Maruti, Tata, Mahindra Slash Production As Festive Offers Fail To Bring Cheer To Auto Sector

As the Indian auto sector faces the worst slump in decades, several automakers including Maruti Suzuki India, Hyundai, Mahindra & Mahindra, Tata Motors, Toyota and Honda have decided to slash production at some of their plants. It is to be noted that the move comes despite offering discounts on their product line-up this festive season. The automakers have reported double digit decline in domestic passenger vehicle sales in September. 

Maruti Suzuki has recently disclosed in a regulatory filing with the stock exchanges that it has cut production by 17.5 per cent in September. Importantly, this is the eighth consecutive month in which the auto major has reduced output due to declining demand. 

The India’s largest automaker has produced 1,32,199 vehicles in September this year down from 1,60,219 units in the same month last year. The scaling down of production in September comes after a massive 33 per cent cut in output in August for the company.  

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Affected due to the continuing slowdown, the heavy commercial vehicle maker Ashok Leyland on Friday last week announced that it had decided to suspend production at its plants at various locations for up to 15 days in October. 

On the other hand, Tata Motors resorted to the unscheduled production cut to correct the mismatch between production and sales. Notably, Tata Motors reported a 63 per cent drop in production of passenger vehicles in September at 6,976 units as compared to 18,855 units in the same month last year. 

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Bosch India, the German auto components major, on Saturday had said, “The company has decided to shut production for 10 days per month in the October-December quarter of the current financial year due as the slowdown has also hit ancillary firms in the auto sector.” 

"The 10-day reduction will enable us to align production with sales of powertrain solutions," the company said in a statement. It is worth mentioning here that the company has 18 manufacturing sites and seven development and applications centres across India. It is supplies key engine parts to several auto companies.

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