Hinduja Group-owned Ashok Leyland on Monday announced the firm would observe non-working days in five plants this month amid falling demand for its products. The firm said its Pantnagar plant situated in Uttarakhand would have the maximum 18 non-working days this month followed by Ennore plant (16 non-working days), Alwar and Bhandara (10 days each), Hosur 1, 2 and CPPS plant (5 days).
Auto sector slowdown has hit the Chennai-based firm, which reported a 50 per cent decline in total domestic sales at 8,296 units for August. The Hinduja Group flagship firm had posted domestic sales of 16,628 units in the year-ago month. But if exports are factored in, cumulative sales have dipped 47 per cent to 9,231 units last month, the company said in a statement.
The worst affected category was the high tonnage trucks. Sales of the M&HCV (medium and heavy commercial vehicle) trucks stood at 3,336 units, down 70 per cent year-on-year. The firm did not fare well on the earnings front too. Consolidated net profit fell 45 per cent year-on-year to Rs 230 crore for the first quarter ended June 30, 2019 compared to consolidated net profit of Rs 421.63 crore in the same quarter last year. The company's consolidated profit before tax (PBT) slipped to Rs 361 crore in the June quarter of FY20, against Rs 536 crore in the corresponding period last year.
Auto sector slowdown has hit plants of other firms too. On September 4, auto major Maruti Suzuki decided to shut down its operations at Gurugram and Manesar plants for two working days-September 7 and 9. The company said that "both days will be observed as no production days". The company did not mention a specific reason for shutting down the plants.
Toyota had also halted production at its plants in Bengaluru on August 16 and 17 "due to the low market demand of vehicles" and a high stock of about 7,000 vehicles.
Edited by Aseem Thapliyal