Bosch extends production cuts on slowdown impact

R. Yegya Narayanan Coimbatore | Updated on March 12, 2018 Published on September 08, 2012

V.K. Viswanathan, MD, Bosch Ltd   -  BL

The prolonged downturn in the auto industry continues to impact the automobile component manufacturer Bosch Ltd which has extended the partial/full suspension of productions in its plants for the fourth month in a row in September.

The company, which started adjusting production at its plants in Bangalore, Nashik and Jaipur to varying degrees since June this year, has said during September production at its Jaipur plant would be fully suspended for four days (all Saturdays), while its Bangalore unit would suspend work partially for five days.

In June, while making the announcement, Bosch Ltd said to ‘adjust production to meet the demand for products and to avoid the unnecessary build-up of inventory’, it would be suspending manufacturing operations at the Jaipur plant from June 28 to 30 and at the Bangalore plant from June 29 to 30. There was no mention of the Nashik plant in the announcement.

Bosch Ltd in July said it was proposing to suspend the manufacturing operations at the Bangalore plant from July 13 to July 14 and again on July 27, 28, and July 30. Work at the Nashik plant was suspended from July 30 to July 31. But its Jaipur plant was shut for a longer period — from July 25 to August 4.

In August, Bosch announced the partial suspension of production at its Bangalore plant for five different days. It its Nashik plant, partial suspension was enforced from August 17 to 31. But work at the Jaipur plant was suspended fully for six working days.

According to the announcement the company made to the stock exchanges on September 7, partial suspension of production will be observed for five days at its Bangalore plant and full suspension of work for four days at its Jaipur plant during this month. The communication did not mention the status of the Nashik plant.

While releasing the company’s Q2 results (the company’s FY is January-December) on August 13, V.K.Viswanathan, MD, Bosch Ltd, said the ‘countrywide economic downturn and declining demand’ in the heavy/medium commercial vehicles and tractors segments had led to slower growth rate. He said ‘a deficient monsoon, depreciating rupee and a relatively high interest rate scenario’ would in the short term ‘continue to pose challenges to the growth of the automotive market in general and to our company’s growth in particular’.

He said the company was taking strong steps to improve operational efficiency, control costs and intensify sales activities to counter this trend.

In the three months ending June 30, 2012, Bosch Ltd earned a net income of Rs 2,157.22 crore, a growth of 6.9 per cent over the same period last year. But net profit fell by 11.3 per cent over the same quarter in 2011 to Rs 247.46 crore.

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Published on September 08, 2012
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