Wednesday, March 13, 2013
By Anil Jangid
Maruti to stop production of petrol cars to check increasing inventory, other car makers to follow
The car sales are down, there is no hope of recovery. Despite of all offers, all price corrections and addition of features have failed to impress the car buyers. So, in this situation what the car makers should do? Should they wait and watch for the situation to improve or suspend production for the time being and utilize the piled up huge inventory. It seems that it is the second option that the largest car maker of India- Maruti has adopted in order to stop the mounting number of petrol cars in its yard. Already the car maker has observed a production cut on Saturday at the Gurgaon plant leading to no production of Maruti Alto and Maruti WagonR.
In the sequence, the car maker will be switching off its machines for two days every month in order to put a check on the increasing number of cars in its yards. Notably, with the demand on a downswing, Maruti car dealers already have stock of petrol cars and they are not placing further demand to Maruti. Thus in this situation, the only thing wise to do is to stop producing petrol cars. Meanwhile, production of diesel cars such as Maruti Swift, Swift Dzire and others such as Maruti Ertiga will continue at other plants.
Sensing almost no demand currently, Tata has already cut short the production of Tata Nano at its Sanand plant. Other car makers such as Hyundai, Toyota and Ford too could follow suit and could announce cut in production of petrol variant of cars. Furthermore, with no signs of improvement in demand currently, it could be possible that car companies have to altogether stop production of petrol cars for more days. In the meantime, car companies are trying their best to increase exports in order to compensate the loss in the domestic market.