Fiat, Tata Motors, Maruti may shut down plants temporarily2 min read . Updated: 19 Jun 2012, 09:36 PM IST With vehicle sales continuing to dwindle due to high interest rates and petrol prices, many automobile manufacturers in India are planning to shut down their plants temporarily to reduce inventories.
With vehicle sales continuing to dwindle due to high interest rates and petrol prices, many automobile manufacturers in India are planning to shut down their plants temporarily to reduce inventories.
While Fiat India is considering shutting down plant for a few days next month, Tata Motors will stop production of commercial vehicles at Pune for three days this week.
The country's largest car maker Maruti Suzuki will have its week-long annual maintenance shut down from next week. Toyota Kirloskar Motor has rationalised production of its petrol cars due to low demand.
Fiat India Automobiles Ltd (FIAL) said its petrol models are not selling well and it is monitoring the inventory situation at present.
'Depending upon the demand and inventory situation, we may shut down our plant for 2-3 days next month. Currently, we are monitoring the inventories at both raw material and vehicles production sides,' FIAL president and CEO Rajeev Kapoor told PTI.
The company, which has a joint venture manufacturing facility with Tata Motors at Ranjangaon in Maharashtra, will decide about the closure of the plant in consultation with the partner, he added.
Toyota Kirloskar Motor (TKM) also said it has streamlined production of petrol cars as per demand.
'We are having some amount of inventory for our petrol cars and it has gone up to over 30 days,' Toyota Kirloskar Motor (TKM) deputy managing director (commercial) Shekar Viswanathan.
A TKM spokesperson further said: 'Only a minor adjustment was made in production to balance out the stocks...This is just a rationalisation of production based on the demand and supply in the market. This is just a temporary measure.'
As per industry estimates, the total inventory of unsold petrol driven passenger vehicles of various companies in May was over 1.93 lakh units, while that of diesel vehicles was over 1.07 lakh units.
Car sales in India grew at the slowest pace in seven months during May with just 2.78% rise as high interest rates, which are hovering around 11-13%, and petrol prices hit the market.
According to SIAM, domestic car sales in last month stood at 1,63,229 units as against 1,58,809 units in the same month in 2011.
The sluggish demand has not only impacted passenger car makers, but also hitting the commercial vehicle manufacturers.
'Given the market scenario, we need to align our production. We will have a block closure from June 22 to June 24 at our commercial vehicle plant in Pune,' a Tata Motors spokesperson said.
Tata Motors will be stopping production of its light and medium commercial vehicles like 407 and 709, he added.
'Going forward, given the high interest rates, slowdown in mining and construction industries, the market has given resistance. Our inventory is under control and we want to keep it under control,' the spokesperson said.
In May, Tata Motors' commercial production declined by 15.89% to 33,271 units, SIAM said.
A spokesperson from Maruti Suzuki said the company will have its week-long annual maintenance shut down from June 25. Last month, it had stopped production of petrol models, like the Alto, M800, A-Star, Estilo and Omni for three days to prevent inventories piling up.