Mahindra & Mahindra slams on brakes as supply overshoots demand

By: | Published: December 17, 2014 1:34 AM

Following a slowdown in sales of its utility vehicles and tractors in November...

Following a slowdown in sales of its utility vehicles and tractors in November and largely througout the year, utility vehicle and farm equipment major Mahindra & Mahindra (M&M) on Tuesday said it will observe production shutdowns till March to align production with demand.

The company said it will cut production across some of its 13 facilities spread across the country on a need basis ranging from 1-7 days. These could include automotive or tractors plants.

“As part of efforts to align production with sales requirements, M&M may observe on a need basis, 1-7 days in a month as ‘no production days’ at some of its automotive and/or tractor plants and /or Chakan plant of its wholly-owned subsidiary Mahindra Vehicle Manufacturers in the period upto March 2015,” the company said in a notification to the exchanges.

“The management does not envisage any adverse impact on the availability of products in the market due to adequacy of stocks to serve the market requirements,” the notification said.

In November this year, M&M’s domestic automotive business registered a 11.5% decline in volumes to 32,100 vehicles compared with a year earlier. For the year-to-date, the decline was 11% to 287,036 vehicles compared with the year-ago period. Tractor sales in November declined 36% to 14,207 vehicles compared with a year ago. For the fiscal, tractor sales declined 6.6% compared with the year-ago period.

Sales of passenger vehicles have been tepid for most part of the fiscal though it improved for some firms in November. The industry body Society of Indian Automobile Manufacturers has projected a low, single-digit growth for the industry in the fiscal.

Production shutdown is a standard measure adopted by auto firms to align production with demand. In the past (last fiscal), Maruti Suzuki as well as Tata Motors have resorted to it.

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