Auto major Maruti Suzuki India Limited has decided to shut down its operations at Gurugram and Manesar plants for the next two working days -- September 7 and 9. The company has said that "both days will be observed as no production days". The company has not mentioned a specific reason for shutting down the plants.
The persistent slowdown in the automobile sector has hit all auto companies, including those who make heavy commercial vehicles and auto-part manufacturers. All major carmakers, including Maruti Suzuki India, Hyundai, Mahindra and Mahindra, Honda and Tata Motors reported a double-digit de-growth in August sales.
Battling with the rising inventory amid a slowdown in demand, Maruti Suzuki Chairman RC Bhargava in August said the company had not renewed the contracts of 3,000 temporary employees . He added that safety norms and higher taxes had "added substantially" to the cost of cars, affecting their affordability.
With India's auto sales declining for the 10th straight month in August, more automotive manufacturers are laying off workers and temporarily halting production to keep costs in check. Japanese carmaker Toyota Motor and South Korea's Hyundai Motor had recently decided to halt production at plants to combat slumping sales.
The ripple effect of the auto slowdown has also brought bad days for auto-part manufacturers too. Denso Corp's India unit, which makes powertrain and air-conditioning systems for cars, had recently laid off about 350 temporary workers at its Manesar plant in north India, reported Reuters. Bellsonica, which is part-owned by India's biggest carmaker Maruti Suzuki and makes fuel tanks and brake pads, has also let more than 350 workers go in Manesar, the agency reported.
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.
The auto industry body Society of Indian Automobile Manufacturers (SIAM) has now urged the government to implement some immediate steps, including reducing GST rates on cars from 28 per cent to 18 per cent, to help manufacturers amid slumping sales. The body on September 2 also asked for the initiation of scrappage policy.
Edited by Manoj Sharma