Motown flashes output cut signal as sales slide - Indian Express

Roudra Bhattacharya : New Delhi, Thu May 09 2013, 09:11 hrs The ghosts of 2012 seem to be haunting car makers in the current fiscal as well. (Reuters) 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 diesel models and utility vehicles (UVs) are now witnessing a sharp moderation in growth on the back of rising diesel prices and a 3% (from 27%) hike in excise duty for SUVs in the Budget this February. "The situation is back to bleak for Maruti Suzuki, Ford and Toyota Kirloskar. Even Mahindra, which did well last year, is in a spot. April retail sales were very poor, which will reflect in the next few months in lower wholesale numbers and production cuts," an analyst said. ... contd. ALSO READ Inflation-linked bonds to debut soon SKS Microfinance posts profit of Rs 2.7 cr in fourth quarter, after mammoth loss China incursion on Salman Khurshid agenda in Beijing, but trade on top Cognizant Technology Solutions Q1 net profit rises 16.6%, maintains outlook Please read our terms of use before posting comments TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s). via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNE0FVzOp5YQclmeQKo-GuT4ipTl3g&url=http://www.indianexpress.com/news/motown-flashes-output-cut-signal-as-sales-slide/1113502/

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