Hero MotoCorp, Tata, Mahindra and Maruti Suzuki are all cutting production as there’s no demand

  • The Indian auto industry is going through one of its worst phases with a 10-month slowdown in sales.
  • Hero MotoCorp has joined Tata Motors, Mahindra & Mahindra and Maruti Suzuki to halt production due to lack of demand.
  • The first quarter results of most auto companies saw falling sales and thus, declining profits.
The Indian auto industry has been in a downward spiral with car sales for over 10 months now resulting in companies halting production.

The two-wheeler market has been affected as well. As proof, Hero MotoCorp has become the latest automaker to halt manufacturing. The country’s largest two-wheeler manufacturer said that its facilities will be closed for four days (August 15 to 18) because of the “demand scenario”.

Its sales declined by 12.2% in the first quarter of FY 20 to 616,526.

"The overall economic and customer sentiments continued to be soft during the first quarter of this fiscal and their impact is clearly visible in the performance of the auto sector. The outlook for the rest of the year will be dependent on multiple factors, including the progress of monsoon and festive season offtake, as well as improvement in liquidity,” Niranjan Gupta, Chief Financial Officer, Hero MotoCorp had then said.

Earlier this month, Mahindra & Mahindra in a regulatory filing said that as part of aligning its production with sales, it would be observing ''No Production Days'' ranging between 8 - 14 days in the second quarter of FY 20.

Another auto giant Tata Motors too confirmed that it is aligning production with the low demand.

India’s largest auto manufacturing company Maruti Suzuki has cut production for six months in a row. It announced that it has cut production by 25% in July.

Maruti Suzuki’s profits fell by 27.3%. It total sales for the first quarter of FY20 fell by 17.9% as compared to the same quarter last year. Meanwhile, Tata Motors’ cumulative income which includes Jaguar Land Rover, included drop by 20%.
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