Production cuts on cards as auto inventory swells

Ravindra Pisharody, executive director, commercial vehicles business unit, Tata Motors, added, “Lack of investment in the last nine months has impacted the growth in the M&HCV segment. Mining states have completely wiped out. One would have expected the second half of the year to be better than first half. However, we have seen industry fall since October, with nothing changing dramatically.”

In a similar move to trim production, Ashok Leyland has reduced working days at its bus and truck plants at Ennore, Pantnagar and Alwar to five days a week (two production shifts a day) from six earlier. “Discounts are running quite high in the market to attract customers in a competitive and sluggish market. We are matching production to demand now to keep inventories in check,” Rajive Saharia, executive director (marketing) said.

In a recent media call, Siddhartha Lal, MD and CEO of India's fourth-largest commercial vehicles maker, Eicher Motors, also said that discounts are rampant in the market, though the company is undertaking internal cost-cutting measures to protect margins.

A recent Nomura Equity research report stated, “The growth outlook in the domestic M&HCV industry has deteriorated further over the last two to three months. Industry volumes have declined by around 35-40% in the last three months.”

The report added, “Recovery in M&HCV industry is

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