Major Indian automobile giants have put a halt to their production during this festive season. Car companies like Maruti Suzuki, Hyundai Motor and Tata Motors faced considerable reduction in sales this year because of the increasing fuel prices and interest rates. These unavoidable conditions left many automotive companies with unsold vehicles.
The growth of the domestic automobile industry, same time last year, was around 30 percent and similar results were anticipated this year as well. However, things are not the same this year. The country's largest car manufacturing company, Maruti Suzuki has also endured considerable downfall in sales. Due to deteriorating demand in the market, all these companies have decided to call a halt to the production, instead of speeding up.
Maruti had to slowdown production of its hatchback models including the popular Alto, WagonR, Estilo and Ritz. On the bright side, the production of Maruti Swift and Dzire is still going strong. Maruti Suzuki Chairman, R.C. Bhargava stated last week that “We are adjusting our production with market conditions. There are some models which are not moving fast enough given the sluggish demand. So, we have tweaked the production schedule to keep our inventory at the normal level.”
Maruti Suzuki is the first car manufacturer to officially announce its production cut decision. The production plants of Maruti made 17,000 lesser cars in the month of August. The company first experienced a drop in car sales in July, registering 16 percent lesser sales. However, company officials expect a positive result during the festive season. Maruti's Marketing and Sales Executing Officer, Mayank Pareek said, “The current slowdown is short term and the demand is expected to revive during the festive season.”
Tata Motors is also following the same trend and is reducing the production of both commercial and passenger vehicles. Managing Director of Tata Motors India Operations, P.M. Telang confirmed, “Yes, we have adjusted production of both passenger vehicles and commercial vehicles in order to align with the market demand.” He further added that “Due to high petrol prices and inflation rate, there has been a slowdown in demand.” However, the exact details of the production cut were not revealed. Most of the production cuts are expected to be made in the higher class segment as the demand for commercial vehicles still goes steady. Telang reassured that the upcoming festive season for the Indian automobile industry is expected to bring favourable results.
nother major car maker, Hyundai motors is also planning to reset its production output. Hyundai has decided on reducing car production irrespective of the fact that India is about to enter the festive month, which is considered as the best time for automobile companies. Commenting on this, the General Motors India Vice President said that “Now, with unprecedented hike in interest rates, hike in petrol prices, high inflation, and negative market sentiments we are not expecting incremental volume of more than 5% during this festival season.”
Though the automobile companies have slowed down their production, they still are hopeful that the sales would increase in the coming festive season.
