Tata Motors, Ashok Leyland Shut Down Factories Due To Low Sales; Business Is Down By 25%
India’s domestic automobile industry is facing its worst crisis, ever.
Tata Motors and Ashok Leyland, two of the biggest automobile manufacturers in India, have shut down their factories, albeit temporary.
And the reason is low car sales.
Tata Motors, Ashok Leyland Shut Down Their Factories
Consumer vehicles are encountering a massive slump in sales, and this has triggered a chain reaction among India’s leading auto-manufacturers.
Both Tata Motors and Ashok Leyland have their factories in Pantnagar, Uttrakhand, and they both have been shut down temporarily.
While Tata Motors has been shut down for two days, Ashok Leyland has shut down their factory for 12 days.
In a notification to all employees, Tata Motors said, “Hence, for optimum line utilisation and effective productivity, it has been decided to observe block closure for two days — July 13 and July 22,”
On the other hand, Ashok Leyland has decided to shut down their factory for 12 days: From July 11 to July July 24. In fact, the Chennai-based auto manufacturing giant had also shut down their factory for a week in June this year.
While Tata Motors has already mentioned the reason as ‘optimum line utilisation and effective productivity’, Ashok Leyland didn’t had any reasons at the time of writing.
As per The Hindu, this shut down has been initiated to avoid inventory pile up, and to reduce unsold units.
Car Sales Down By 25% In June
If we talk about the automobile industry as a whole, then June was one of the worst months ever.
Overall, the car sales was down by 25%, and out of this, consumer vehicle sales was down by 12%.
Here are few dismal numbers related with car sales in the month of June, which most probably triggered Tata Motors and Ashok Leyland to shut down their factories:
- Medium and Heavy Duty trucks reported a decline in sale by 19%, as only 21,512 units were sold
- In the Q12019, Consumer Vehicles sales were down by 10%, as only 2.08 lakh units were sold
- Medium and Heavy commercial vehicles was the niche which encountered worst sales: Only 64,000 units were sold, which is a sharp decline of 19%
- Ashok Leyland witnessed 23% less sales, as they were able to sell only 8123 units
- Tata Motors too witnessed a dismal record, as their sales was down by 19% at 9358 units
- In the month of June, Domestic passenger vehicle (PV) fell by 17.54% to 2.25 lakh unit
- In June, Domestic car sales volume was down by 24.9%, as only 1.39 lakh units were sold.
These numbers are based on the Society of Indian Automobile Manufacturers (SIAM) data.