Automobile Crisis: Maruti, Tata, Honda, Mahindra Shut Production; Rs 35,000 Crore Of Cars Lying Unsold In India

Rs 35,000 crore of cars are lying unsold in India
Rs 35,000 crore of cars are lying unsold in India

The automobile industry, mainly the automakers in the country are in pits of despair. The scenario is the worst in last ten years. According to latest census, there has been about half a million vehicles $5 billion passenger vehicles are lying unsold, levying heavy inventory charges and loss to automakers.

Maruti Suzuki Drops More than Ever

Maruti Suzuki,  alongwith Tata, Honda and Mahindra have decided to shut down their production due to unsold stock, to compensate with loads of unsold vehicles. It is not just the four wheeler showing such catastrophic degradation in sales. The two-wheeler too, project 3 million unsold stock, worth ?17,000 crores.

Passenger vehicles worth Rs 52 thousand crores are lying unsold. This will definitely impact the Indian economy. Report have signaled liquidity crunch, slow job growth and weak buyer sentiment as the reasons depicting such a downfall in sales of automobiles.

Also, due to problems like traffic congestion, rising commute times and hassle in parking, more and more people have started turning towards  public transport and app-based cab services like Ola and Uber.

Maruti, Mahindra and Tata, All Shut Down Production

The shutdown of vehicle manufacturing started in the month of May itself with Maruti Suzuki, Mahindra and Tata Motors suspending production in the past month.

  • Maruti Suzuki plans to shut down again, from June 23-30
  • Mahindra Vehicle Manufacturers will do the same for 5-13 days in the first quarter of 2019-20.
  • Tata Motors shut down its production unit recently, from May 27 to June 3.
  • Honda Cars India was shut down from June 5-8.
  • Renault Nissan and Skoda Auto plan another round of shutting manufacture this month.

Maruti Suzuki, the country’s largest automaker has the capacity to manufacture 15.5 lakh units at its two facilities in Gurgaon and Manesar. The company is dealing with inventory of around 50,000 vehicles as compared to an average of 25,000-30,000 cars.

Hyundai Motors on the other hand, has showed positive growth by selling 42,502 units in May 2019, as compared to sales of 45,008 units in May of 2018. The exports too were increased to 16,600 units from 11,008 units, this May as compared to same period last year.

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