Cut in production rate for many manufacturers in India

While the automobile industry was growing in leaps and bounds last year, this year, it seems to be very different with the prices of fuel being revised twice. The spike in petrol prices have resulted in the downfall of the demand of petrol cars and even diesel ones. Already all the major companies are following the retail technique wherein vehicles are being produced on the basis that there are already orders for them. Nearly a 10 percent production cut has been witnessed in production levels last month, keeping the month before that in sight. Now, for the month of June, the production levels have lowered down even more.

SIAM or Society of Indian Automobile Manufacturers says that most of the manufacturers don’t openly discuss these issues and hence it is very difficult to compile data about the same. Manufacturers are bringing in more and more of their schemes which would actually suit their buyers well and to get rid of the existing stock. GM’s Corporate Affairs Vice President, P Balendran, said that they weren’t expecting the market conditions to improve in the following months, until and unless, the Government decides to reduce the fuel prices. Maruti and Mahindra, it is said would actually shut down their plants for a good one week so that the ratio of demand and supply can be met. The one week shut down would also give their machines the time to be serviced. However, Maruti may not go ahead with the actual plan since the recent labor unrest has already caused inventories to dry up at  the dealer base. Many manufacturers have also stopped taking in components in lieu of the slow down. This is on a temporary basis though.

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