Output cut signs flash on auto avenue

During April-November, M&HCV sales fell 16% to 1.78 lakh units, with November figures alone falling 33% 17,441 units. “We expect a cyclical upturn by the second half of 2013-14 accompanied by lower interest rates,” a Deutsche Bank analyst said.

Industry leaders Tata Motors and Ashok Leyland, who together command 80% of the 3.4-lakh unit domestic M&HCV market, reduced output through the year. “We have done block closures of 2-3 days from time to time at our plants to reduce inventory build-up in commercial vehicles,” the Tata Motors spokesperson added. A supplier industry source said Ashok Leyland too has reduced output at its Pantnagar factory.

Analysts feel M&HCV makers may have to go for further cuts in January if the market continues to be sluggish. A Barclays report after Tata Motors and Ashok Leyland's announced their Q2 results said a marginal improvement in Q3 earnings was expected, but would still be limited due to heavy discounts and inventory levels.

Among passenger vehicles, inventories for many petrol cars and some diesel vehicles have touched 4-6 weeks, with Tata Motors, Hyundai, Volkswagen, Ford, GM and Fiat facing the heat. GM has already reduced output through 'no-production days'. Others may be forced to follow suit.

Maruti Suzuki and Mahindra & Mahindra have seen relative success both on new launches and the popularity of select diesel models. Maruti saw strong demand for the new Alto 800 and diesel models of the Swift, Dzire and Ertiga, while Mahindra's charge was led

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