A sharp slowdown in sales is forcing car makers to take steps to cut back on production.

The country’s largest passenger car manufacturer Maruti Suzuki India will shut its Gurgaon plant for a day on Saturday in a bid to clear stocks. This comes just days after Tata Motors announced a buy-back scheme for the Manza sedan.

“The plant, where 3,000-3,200 vehicles are manufactured every day, will be shut on Saturday,” a Maruti Suzuki official said on Friday.

The Gurgaon plant manufactures all petrol engine vehicles, including M800, Alto, WagonR, Estilo, Dzire, Ritz and Ertiga. The diesel versions of the Ritz and Ertiga are also rolled out from this factory.

Maruti’s production had dropped to 1.20 lakh units in February from 1.23 lakh in the same month last year. Cumulative production also fell from 1.22 lakh units in January.

The company’s domestic sales declined by 9 per cent last month to 97,955 units, from 1.07 lakh units in February last year.

Rising vehicle prices, costlier fuel and high interest rates have hit car sales.

Some dealers are offering discounts, yet sales remain slow. For example, “there is a discount of Rs 10,000 on the petrol version of Ertiga and Rs 15,000 on the diesel version, and they are available off the shelf, unlike a few months back, when a customer had to wait a few months for delivery,” a Delhi-based dealer said.

Most manufacturers are offering discounts and other purchase incentives, including extended warranty and even buy-back options, to push sales.

In November, Tata Motors shut its Jamshedpur plant partially for three days because of low demand for its commercial vehicles. The company had also closed for three days in June the Pimpri (Maharashtra) unit to align production with demand.

ronendrasingh.s@thehindu.co.in

(This article was published on March 8, 2013)
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