Five Ashok Leyland plants to see shutdown in September

On account of weak demand, commercial vehicle manufacturer Ashok Leyland on Monday announced that five of its plants would observe non-working days in September.

According to the filing by the commercial automobile giant, the Ennore plant will shut operations for 16 days. The number of non-working days will be 1-2 at the Hosur plant, five at CPPS and 10 each at Alwar and Bhandara. Pantnagar will see 18 non-working days.

The company, in its regulatory filing, stated, “We write to inform you that the following are the non-working days at our various plant locations during September 2019 due to continuous weak demand for our products.”

The announcement comes as the company reported a 50% decline in its domestic commercial vehicle sales at 8,296 units in August as against 16,628 in the same period last year.

Total sales (domestic and exports) witnessed a 47% decline to 9,231 units in August from 17,386 in the same month last year.

The worst hit was medium- and heavy-commercial vehicle sales (domestic and exports), which stood at 5,349 last month from 13,158 in the corresponding period last year — a sharp dip of 59%. Cumulative sales of light-commercial vehicles fell 8% year-on-year (y-o-y).

Previously, the company had shut down its Pantnagar plant for nine days in July, due to weak demand and outlook for the industry.

The plant had to shut operations in June, too, to align production and sales requirements.

According to Society of Indian Automobiles Manufacturers (Siam), the commercial vehicle segment registered a decline of 19% in April-August period as against the same period last year.

Sales of medium- and heavy-commercial vehicles declined 28.98%.

Similarly, sales of light-commercial vehicles declined 12.7% y-o-y. Passenger vehicle sales fell by 23.54% in April-August, compared to the same period last year.

In the passenger vehicles segment, sales of passenger cars, utility vehicles and vans decreased 29.41%, 6.27 % and 34.04 % y-o-y, respectively.

Recently, production cuts were announced by other vehicle manufacturers as well.

India’s largest car manufacturer Maruti Suzuki has announced it would shut down operations at its Gurugram and Manesar plants for two days, September 7 and 9.

Mahindra & Mahindra (M&M) had previously announced that it would shut down its plants for eight to 14 days in the July-September quarter.

In the April-June quarter, Maruti Suzuki, Toyota, Honda Cars India and Tata Motors had cut production by 7-18% y-o-y.

Two-wheeler makers Hero MotoCorp, Honda Motorcycle, TVS Motor and Royal Enfield had also cut production to slash high inventory at the dealers.

The cut in production levels started in January-February after a pile-up in stocks, post a dull festive demand.

Demand for cars and two-wheelers has remained subdued since the second half of FY19.