Motown flashes output cut signal as sales slide - The Financial Express - Financial Express

The ghosts of 2012 seem to be haunting car makers in the current fiscal as well. After several output cuts in FY13, slowing sales and rising stocks may yet again force Maruti Suzuki, Mahindra and Toyota Kirloskar to lower production for the first time this fiscal around June, say analysts and dealers. Current inventory levels are said to be similar to the levels in December 2012, the worst in recent times for the industry. What's worse, diesel and utility vehicle sales too have been impacted this time around. Rising inventory is a clear indicator that car makers did not gauge market demand correctly while reducing production earlier to align it with demand. Barring Tata Motors, which had cut production the most, others have seen inventories rising to the December 2012 level. Thanks to the correct levels to which it had reduced production, Tata Motors may not need further cuts. The company has reduced Nano output by over 85%, while production of some other passenger vehicles has been lowered by 30-40%. "The market is difficult, but since the stock has already been corrected since October-November 2012 by the company, our inventories are in check," a Tata Motors dealer said. Last fiscal, Maruti Suzuki had closed its Gurgaon plant several times to bring down production. Several shutdowns followed its first three-day closure in May-June 2012, till as recently as March this year. There is, however, a difference. While demand for petrol cars is still sluggish — impacting companies like Maruti Suzuki and Hyundai — even ... contd. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHSJywzgh0VpXqkphTzfCCwcyyURg&url=http://www.financialexpress.com/news/motown-flashes-output-cut-signal-as-sales-slide/1113413

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