Demand slump hits production units; Petrol car productions on hold

The demand declination in the market has actually affected the automobile segment across the globe. The potential of the demand slump can be explained by the way Toyota Kirloskar Motor has put a hold on the production of all its petrol cars, and the way Fiat is giving its car production a second thought. As per reports coming in, Fiat is considering shutting its production units down for a few days in the next month. Another blow to automobile production came from Tata Motors and Maruti Suzuki. While Tata Motors will stop production at Pune for three days a week, the latter is being reported to carry out its week-long annual maintenance shut down from the coming week.

As per Toyota Kirloskar Motor Deputy Managing Director, ShekharVishwanathan, it’s because of uncontrolled inventory of petrol cars (of over 30 days) that the company took this decision. He added that the company stopped its petrol car production from June 16th, just to avoid further accumulation of stock. But, what gave a blow was that Mr. Vishwanathan still kept something veiled. It’s the answer to question about company’s plans to resume its petrol car production. He rather preferred to say that the TKM’s diesel vehicles’ sales are steady, but the waiting periods are gradually coming down. With the production being shut down, the rolling out of petrol variants of Liva, Etios, Corolla Altis and on-demand petrol Innova are largely affected.

Demand slump hits production units; Petrol car productions on hold
Fiat too, has been seen to share the same experience, as Fiat India Automobiles Ltd. officials have been spotted showing their concerns on the declining sales of their petrol vehicles. They added that the company too is keeping an eye on their inventory scenario. These factors were made official by FIAL President and CEO Rajiv Kapoor, as he said that the coming may shut down production for 2-3 days in the next month, but it depends on inventory and demand situations. He added that the company is right now keeping an eye on the inventory situation, at raw materials and vehicles productions as well.

Nothing new can be seen at the Tata Motors side too. In fact, Tata Motors spokesperson made it official that the company is going to shut its production down at their commercial vehicle plant at Pune from June 22nd to June 24th. He added that it’s because of the current market scenario that the company has to realign its production. The production of 407 and 709 (company’s appealing light and medium commercial vehicles) are going to be shut down during this period. He further added that the market has been observed to offer considerable resistance to increasing interest rates, downturn in mining and construction industries, because of which the company wants its inventory to be under control under any circumstances.

On the other hand, Maruti Suzuki spokesperson announced that the company is going to carry out its week-long annual production from June 25th. The company has already made a mark on production being kept on hold for three days a week in the last month, when it stopped production of Alto, M800, A-Star Estilo and Omni.

Market has already experienced the slowest pace of car sales growth in seven months during May. Quantitatively, it grew with just 2.78%, as petrol and interest rates shot up.In some or other way, the bottom line is still the same; hold on production because of demand slump.

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