KOCHI: Leading tyre maker Apollo Tyres has decided to stop the production at its two factories in Kerala -- Kalamassery in Ernakulam and Perambra in Thrissur -- for two days ending Saturday due to sluggish demand. The company produces off-highway tyres, truck tyres, bus tyres and tyres for light commercial vehicles (LCVs) at its Kerala plants.
When contacted, Apollo Tyres spokesperson said: “While the demand for our tyres in the replacement market is still strong, the slowdown in the vehicle sales has resulted in lesser demand from the Original Equipment Manufacturers (OEMs). Our production is tuned to the market demand and as such this has called for rationalisation from time to time.
In the current scenario as well, there is a need to rationalise the production, including rationalising of the contractual manpower. ”The spokesperson said the company hopes that the good monsoon, the recent stimulus package by the government and the ensuing festivals will see a turnaround in demand from the OEMs.
Company to resume production tomorrow
The installed capacity of Apollo Tyres’ plants in Perambra and Kalamassery is 1,13,724 metric tonnes and 35,567 metric tonnes, respectively, according to its latest annual report. In addition to the two plants in Kerala, the Gurgaon-headquartered Apollo Tyres also has factories in Limda (Gujarat), Chennai and Chinnapandur (Andhra Pradesh). Sources said the company could be slowing down production in these plants as well. “There is a slowdown in the passenger car segment. Obviously, it will hit us too,” said a source.
Apollo Tyres supplies tyres to Maruti Suzuki, which has reported 36.1 per cent decline in sales to 93,173 units during August. The cumulative domestic sales of passenger cars for the April-August 2019 period have fallen 15.89 per cent to 97,32,040 units, as per the latest data by Society of Indian Automobile Manufacturers.
The domestic sales fell 23.55 per cent in August, 18.71 per cent in July, 12.34 per cent in June, 8.62 per cent in May and 15.93 per cent in April. There is a similar slowdown in demand for trucks, lorries and LCVs across the country.
The Kerala plants supply tyres to OEMs such as Ashok Leyland, Tatas and Eicher Motors.
“As per an agreement with trade unions in Kerala, the company can shut down production for two-three days or even more in the two factories if the inventories pile up due to slackening demand,” said a source, adding that the company would resume production from Sunday.