With automobile sales showing no signs of recovering positive momentum, rising inventory levels have begun forcing manufacturers to cut down on production or working days at their facilities. The latest to do so is Ashok Leyland, which announced on Monday that it will halt work at five of its facilities for a few days in September, with two — at Ennore and Pantnagar — to remain shut for more than half of the month.
The company disclosed in a market filing that “due to continued weak demand” for its products, it halts work at five of its plants.
According to the firm, its Hosur facility will not work for five days in September and the Alwar and Bhandara units will be shut for 10 days each. The Ennore plant and the Pantnagar factory, however, will be shut for a whopping 16 days and 18 days respectively.
Ashok Leyland’s decision to cut down production comes on the back of a long line of similar announcements from other automobile manufacturers since May this year. The recent few weeks have seen companies like Mahindra & Mahindra, Tata Motors, Maruti Suzuki, Toyota Kirloskar and Hyundai Motor announce a halt in production for a few days each to adjust rapidly inflating inventory levels.
In fact, the Federation of Automobile Dealers’ Associations has been repeating warnings that dealer inventories across the board are increasing as sales growth continues to fall at the worst pace in nearly two decades.
“Commercial vehicle (CV) inventory continues to remain at high levels, and unlike the slight uptick in sales seen in July for passenger vehicles and two-wheelers, CV sales growth continued to be negative in double-digit and gave little room to dealers to reduce Inventory,” it said in August.
CV production fell a whopping 26.5 per cent in July and an even higher 42 per cent in August, said SIAM data.
Announcements from auto firms
Mahindra & Mahindra, Tata Motors, Maruti Suzuki, Toyota Kirloskar and Hyundai Motor announced a halt in production for a few days to adjust rapidly inflating inventory levels