Auto News

Distress in Auto Industry Due to Inflation

By Motortrend India Staff   |   04 August,2008

Inflation is causing great hindrance in the production work of the auto industry. Major players have slowdown their process and operation of the car plants. India’s major car manufacturer Maruti Suzuki has closed one of its plants for two days whereas other car players like the Tata Motors and Mahindra & Mahindra are also adjusting production capacity due sluggish business output.

According to a Maruti spokesman, “The plant was closed for two days in July-end, but there was no production distraction. Production has been as per schedule. July 26th was a holiday as part of the annual holiday calendar announced in March and on July 25 we have swapped with a holiday in October. While industry sources call this a “shutdown”, the spokesperson said it was only a pre-scheduled three-day holiday as the plant’s weekly off is a Sunday.”

Society of Indian Automobile Manufacturers (SIAM) figures reported, “Passenger car production fell from 1,22,632 units this May to 1,19,307 in June. The July figures are likely to be a tad lower.”

The outlook for July-September is miserable. Moreover, the vendors and suppliers are expecting a 25-30% cut in orders. The car output is also anticipated to reduce 10-15% this quarter.

Maruti is leading other car manufactures with 50% market share where company’s like Mahindra & Mahindra are contemplating shutdowns unless the market response improves by the festival season.

Related Content