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Auto sector slowdown: Ashok Leyland to suspend production at various plants this month

  • The move by the company follows slowdown in the automobile sector that has forced many manufacturers and component suppliers to cut production and plan temporary plant closures

  • Last month, Chennai-based TVS Group auto component maker Sundaram Clayton, automobile major Maruti Suzuki, and two-wheeler maker Hero MotoCorp had announced a suspension of production at their facilities in line with market demand

  • Shares of Ashok Leyland were trading at Rs 63.05 apiece, down 1.33 percent over the previous close at the BSE

Chennai: Commercial vehicles major Ashok Leyland on Monday said it will suspend work at its various manufacturing facilities across the country this month in order to adjust production with market demand.

The company, which manufactures a range of heavy and light commercial vehicles, said it will shut production across its plants for certain periods during September.

"Following are the non-working days at our various plant locations during September 2019 due to continued weak demand for our products," the Hinduja Group flagship firm said in a regulatory filing.

The Chennai-based firm announced 16 non-working days for its facility in Ennore, five days at Hosur (Tamil Nadu) unit, 10 days each in Alwar (Rajasthan) and Bhandara (Maharashtra) unit and 18 days in Pantnagar (Uttarakhand) facilities.

The company's move comes in the wake of an unprecedented slowdown in the domestic automobile industry, forcing auto companies to take production cuts in order to reduce inventory at dealerships.

 Auto sector slowdown: Ashok Leyland to suspend production at various plants this month

Representational image. AFP

According to data released by the Society of Indian Automobile Manufacturers (SIAM) on Monday, overall sales of commercial vehicles were down 38.71 percent to 51,897 units in August as compared with 84,668 units in August 2018.

In August, commercial vehicle manufacturers curtailed production at their plants by 42.05 percent to 54,873 units as compared with 94,698 units in August 2018, SIAM said.

Last month, Mahindra & Mahindra (M&M) had announced to suspend production for 8-14 days in the ongoing quarter while Tata Motors also confirmed taking steps to align manufacturing with tapering demand.

Even passenger vehicle manufacturers, including market leader Maruti Suzuki India (MSI), have taken steps to cut production owing to weak demand in the market.

MSI reduced its production by 33.99 percent in August, making it the seventh straight month that the country's largest carmaker reduced its output.

Overall, automobile sales logged worst-ever fall last month since the industry body started recording wholesale vehicle sales data in 1997-98. Vehicle sales across categories, including passenger vehicles and two-wheelers and commercial vehicles stood at 18,21,490 units last month as against 23,82,436 units in August 2018, a fall of 23.55 percent.

Ashok Leyland shares on Monday ended 1.56 percent down at Rs 62.9 apiece on the BSE.

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Updated Date: Sep 09, 2019 19:01:21 IST