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Carmakers also take output-cut route
Published on 11 Nov. 2008 1:41 AM IST
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With slowdown staring it in the face, motown has begun slashing production schedules to avoid further inventory pile-up at the dealer end. Till now, only commercial vehicle makers had announced drastic cuts in production, but passenger car companies have also started adjusting output to reduced demand. According to top component suppliers, they have been asked by passenger car companies to cut production of auto parts by 5-7% and more reductions are likely going forward. A large supplier indicated that car market leader Maruti Suzuki India has scaled back production by about 300 units a day in the October schedule. The company planned to make 3,000 cars per day during the month. However, with the company's A-Star model slated for launch this month, the situation may somewhat improve in November and December. With the end of festive season, the December quarter is anyway a lean period for carmakers. Mayank Pareek, executive officer (sales & marketing) for Maruti, said due to the ongoing economic slowdown, the company has already revised its sales growth target to below 5% against 10% projected at the beginning of the year. A spokesperson for Maruti maintained that there has been no reduction in production and the October sales of 75,000 cars were the company's highest ever. Tata Motors, which appeared to be mulling a closure of its commercial vehicle plant at Pune for six days this month to avoid inventory build-up, is believed to have told component suppliers to scale down supplies for its Indica model by at least 10% even as it maintained that passenger vehicle production was on schedule.

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