Economy

Auto slump strikes again: Mahindra plans 8-14 ‘No production days’ in Q2

Our Bureau Mumbai | Updated on August 09, 2019 Published on August 09, 2019

The Indian auto industry has been going on a prolonged slump.

The passenger vehicles segment has been the worst hit with sales continuing to decline for almost a year now.

After warning of job losses and reporting a 26 per cent dip in its quarterly profits, the Mahindra Group said on Friday it will shut down production at its plants across the country for 8-14 days in the second quarter.

This comes a day after India’a largest commercial vehicle firm Tata Motors Ltd announced a three-day block closure at its plants in Pimpri (Pune) and Jamshedpur.

In a notification to the stock exchanges, M&M said: “The company... as part of aligning its production with sales requirements, would be observing ‘No Production Days’ ranging between 8 -14 days in various plants of the company and MVML (Mahindra Vehicle Manufacturers Ltd) during the second quarter.”

Vehicle availability

M&M also said the move is not likely to impact the availability of its vehicles in the market since there are adequate stocks.

The company, on Wednesday, had cautioned of job losses owing to the ongoing slowdown in the auto industry even as it reported a 26 per cent decline in Q1 FY20 profit to ₹918 crore, against ₹1,238 crore in the previous-year period. Pawan Goenka, Managing Director, had remarked that the automobile industry was going through one of its worst slowdowns in recent times.

The slowdown beleaguering the auto industry has been a prolonged one. Passenger car sales have plummeted every month over the past year, with October 2018 being the sole exception.

This June, four out of the six main passenger vehicle makers registered a double-digit fall in sales. Insufficient liquidity, higher rejection rate in financing and overall negative consumer sentiment have cast a shadow on spending.

Mahindra said the plant shutdowns are meant to align its production with sales requirements

 

Published on August 09, 2019
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