Automakers cutting production due to slowing demand

Automakers worldwide are cutting production to check the huge build-up of inventories and slowing demand. According to some vendors, Maruti Suzuki, Tata Motors, Ford Motor and GM have taken a hit on sales, and are therefore streamlining production plans to adjust to the current slowdown. We are expecting a 25-30% cut in orders for the quarter,” said a Delhi-based vendor. According to sources in the automobile industry, car production is expected to be trimmed by 10-15% in the current quarter. The largest manufacturer, Maruti Suzuki, is adjusting the production in line with the huge inventory lined up with the dealers. Besides the high inventory (stock of cars at warehouse) of vehicles, we are dealing with a situation where customers are rejecting petrol cars due to the recent fuel price hike. However, the company spokesperson said: “The production is going on routine without any changes in the schedule.” Meanwhile, automakers have reduced discounts fearing a big hit on their bottom lines. (July 11, 2008)