NEW DELHI: IN order to maintain its inventory level with dealer showrooms that are unable to find buyers, Maruti Suzuki, India’s largest carmaker, cut its production by 33.99 per cent in August, making it the seventh straight month that it has reduced its output.
The company produced a total of 1,11,370 units in August as against 1,68,725 units in the year-ago month. On Sunday, the company had reported a 33 per cent dip in total sales for August.
While production of mini and compact segment cars, including Alto, New WagonR, Celerio, Ignis, Swift, Baleno and Dzire was down by 34.1 per cent to 80,909 units, production of utility vehicles such as Vitara, Brezza, Ertiga and S-Cross declined 34.85 per cent to 15,099 units. Owing to the slowdown, the carmaker had recently said that it had not renewed the job contracts of around 3,000 temporary workers.
GST cut needed
The slew of measures announced by the finance minister might not be enough to boost sales, said auto industry lobbying body Siam on Monday. It added that the government should urgently consider reducing GST rates from 28 per cent to 18 per cent.
Rajan Wadhera, president, SIAM, said that sales numbers for August coming from manufacturers indicated that the market had not responded to the measures taken by the finance minister last month.
“The ability of the industry to provide large discounts is limited, and this only highlights the need for the government to consider reducing the GST rates from 28 per cent to 18 per cent, which would significantly reduce the cost of vehicles and in turn create demand,” Wadehra said. He added that since the festival season was around the corner, it was imperative that these decisions were taken quickly.