Maruti Suzuki cuts production for the 7th consecutive month: What’s making carmakers bleed

For the month of August 2019, sales for the carmaker stood at 1,06,413 units, suffering a decline of 33 per cent in comparison to the same month last year when the sales were 1,58,189.

By: | Published: September 2, 2019 6:13 PM

For the 7th consecutive month, Maruti Suzuki, the leading carmaker in India has had to cut production at its manufacturing plants. The Indo-Japanese carmaker reduced production by 33.99 per cent in August 2019. For the aforementioned month, Maruti Suzuki produced 1,11,370 units in comparison to 1,68,725 units during the same month last year. In the month of July, Maruti Suzuki has cut its production by 25.25 per cent. For the month of August 2019, sales for the carmaker stood at 1,06,413 units, suffering a decline of 33 per cent in comparison to the same month last year when the sales were 1,58,189.

It is not just Maruti Suzuki, but the entire auto sector which is currently going through one of its biggest slowdowns. Automobile manufacturers across the spectrum are observing production and a massive decline in sales. This has also resulted in job cuts primarily in the auto component manufacturing industry. When talking about OEMs, close to 15,000 jobs have been lost. More than 2 lakh people have lost their jobs at the dealership level. Not only this but according to the Society of Indian Automobile Manufacturers (SIAM), more than 13 lakh jobs, in the automotive component manufacturers, are at risk at the moment.

But what is the reason behind this slowdown? There are multiple factors involved. First, it was the general elections as the uncertainty pertaining to the result was stopping people for buying a new vehicle. In addition to this, an overall week state of the economy is also keeping a buyer away from the showrooms. The upcoming transition to the BS-6 emission regulation coupled with the massive push for electric vehicles is also adding to the plight. Also, the rising congestion in cities has resulted in buyers, especially youngsters opt for ride-hailing services instead of buying a vehicle.

The finance ministry has recently introduced several measures which are expected to improve the condition of the Indian auto sector. These include allowing the continued registration of ICE vehicles and electric vehicles going into the future. In addition to this, the FM also stated that BS-4 vehicles purchased before March 31st will be allowed to remain operational for their entire period of registration. Furthermore, the ban on the procurement of vehicles by government departments has also been lifted. Also, the provision to raise the registration fees for ICE vehicle has been postponed till June 2020.

Inputs: PTI

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