Mahindra and Mahindra announced that it will stop the production of its models for a few days in December 2016 to adjust inventories and due to the recent demonetisation of Rs 500 and Rs 1,000 currency notes. The company will also shutdown the production at some of its automotive and tractor plants in the country in lieu of planned annual maintenance.
"The company will be undertaking scheduled maintenance shutdown at some of its automotive and tractor plants in December 2016. The company further will also observe on need basis a few days as No production days at some of our automotive and tractor plants, including the Chakan facility as part of its efforts to optimise inventories during December year-end. We do not envisage any adverse impact on the availability of products in the market due to adequacy of stocks to serve the market requirements," Mahindra & Mahindra told PTI.
After the demonetisation of Rs 500 and Rs 1,000 currency notes by the Government of India on 9th November 2016, the automotive sector has resulted in low sales growth, especially in rural areas. In the month of November 2016, Mahindra and Mahindra registered a cumulative drop in sales by 21.85 percent. This also included the tractor segment which witnessed a decline of 21 percent in November 2016. Before the demonetisation, the company was trading at Rs 1,193.05 during mid-day which fell by 1.1 percent as compared to the previous stock rate at Bombay Stock Exchange.