Hit by slowdown, auto major Mahindra & Mahindra said on Thursday it will stop production for up to six days in the forthcoming months at its automotive plants to adjust output to demand in the market.
The company announced on July 11 that it would stop production at its automotive plants for a period ranging from 1 to 8 days during the remaining period of the month.
". . .As part of aligning its production with sales requirements, (the company) would be observing no production days at its automotive plants for a period ranging from 0 to 6 days in the forthcoming months," Mahindra & Mahindra (M&M) said in a filing to the Bombay Stock Exchange.
Mahindra Vehicle Manufacturers Ltd, a wholly owned subsidiary of the company, would also be observing similar no production days for its plant at Chakan, it added.
"The management would be having a close watch on the market conditions and would from time to time be reviewing such no production days to adjust production in line with the demand," the company added.
Apart from the Chakan unit (Maharashtra), the company manufactures its automobiles at plants including in Nashik and Haridwar.
The announcement comes in the wake of declining sales the company has witnessed.
M&M today reported 21.17 per cent decrease in its total sales at 37,096 units in July, 2013 as compared to 47,059 units in the same month last year.
The increase in excise duty on sports utility vehicles to 30 per cent from earlier 27 per cent in this year's budget has resulted in increased prices of M&M's best selling models including XUV500, Scorpio, Xylo and Bolero, which has hurt its sales.
Shares of Mahindra were trading at Rs 879.00 per scrip in the afternoon trade on the BSE trade, down 3.63 per cent from their previous close.
Car sales in India had fallen for a record eighth month in a row in June with a dip of 9 per cent as economic slowdown and low consumer sentiments continue to hit demand.
According to the SIAM, domestic car sales stood at 1,39,632 units in June this year as against 1,53,450 units in the same month last year.
The official industry sales data for July will be out later this month.
Image: A worker cleans a logo of Mahindra & Mahindra; Photograph: Babu Babu/Reuters
