Business Today

Time For Capex Cut

Hero MotoCorp has announced a capex cut of up to 20 per cent or Rs 300 crore. Around 3,000 Maruti Suzuki temporary workers have lost their jobs
twitter-logo Nevin John   New Delhi     Print Edition: October 6, 2019
Time For Capex Cut

Manufacturing companies, which announced big expansion plans in the last one year, are now reducing their capital expenditure plans, especially after vehicle sales crashed 23.55 per cent in August-the steepest fall since tracking of wholesale vehicle sales started in 1997/98.

Mahindra & Mahindra has deferred 10 per cent of its planned capex of around Rs 1,000 crore by a year, besides executing plant shutdowns in phases. If sales do not pick up in the festive season, it will have to undertake the same exercise in October too.

Hero MotoCorp has announced a capex cut of up to 20 per cent or Rs 300 crore. Around 3,000 Maruti Suzuki temporary workers have lost their jobs. Tata Motors, Ashok Leyland and TVS group companies are also planning plant shutdowns. A big maker of automobile steel, Tata Steel, has decided to cut capex by Rs 4,000 crore, including in Europe and India. Industry sources say many manufacturing companies are silently deferring capex and preparing lists for lay-offs.

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