Auto firms stop production as demand slump continues

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Hit by a demand slump, Toyota Kirloskar Motor has stopped production of its all petrol cars, while others like Fiat are considering shutting down plants for a few days next month.

While Tata Motors will stop production of commercial vehicles at Pune for three days this week, Maruti Suzuki India will be having its week-long annual maintenance shut down from next week.

"We are having some amount of inventory for our petrol cars and it has gone up to over 30 days. To control the stock from piling up further, we have stopped production of our entire range of petrol cars from June 16," Toyota Kirloskar Motor (TKM) Deputy Managing Director (Commercial) Shekar Viswanathan said.

He, however, did not share the company's plans on how long the petrol car production will continue to be withheld.

TKM rolls out petrol variants of its small car Liva, sedans Etios and Corolla Altis. It also produces a petrol variant of Innova on-demand.

Viswanathan said the company's sales of diesel vehicles are steady, but the waiting periods are coming down.

According to Society of Indian Automobile Manufacturers (SIAM) data, TKM had rolled out over two-fold more passenger cars in May that stood at 8,511 units.

Expressing similar sentiments, 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 said.

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.

FIAL's car production in last month went down by 57.13 per cent to 1,041 units, SIAM had said.

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.

The company 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 per cent 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.

According to SIAM data, the company's car production in last month fell by 8.42 per cent to 87,220 units.

Car sales in India grew at the slowest pace in seven months during May with just 2.78 per cent rise as high interest rates 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.