Auto companies like Maruti Suzuki, General Motors and Toyota cut petrol car output

The effect of higher petrol prices is telling on the car industry . With consumers gradually shifting to diesel models , petrol variants are increasingly finding no takers in the market , forcing companies to shutdown their production.

As petrolinventories pileup at dealerships and stockyards of companies , manufacturers are left with no choice but to cut production .In any case ,companies are being forced to dole out incentives and discounts to boost sales of petrol cars . “So the growth is coming only at a cost,” said a company official , requesting nottobe named .

Top companies are slashing petrol car output to align themselvestothe new market reality and these include Maruti Suzuki ,General Motors and Toyota .

Maruti has already saidthat salesof its petrolcars areunder pressure and arelikely to fall by 50,000 units this fiscal. Company CEO Shinzo Nakanishi said that fall in volumes could be even steeper if petrol prices continue to move up sharply while diesel remains atthesamelevel .

The company had shut production of key petrol models like Alto, Estilo and A-S tar for threedaysin May-end andearly this month . And it is set for another production shutdown from Sunday for plant maintenance that runs for one full week. “Petrol car sales are very low as the market sentiment is down … Wedo notbelievein creating excess stock . So ,we adjust our production accordingly ,” Maruti’s managing executive officer (marketing and sales ) Mayank Pareek said .

General Motors has also undertaken a similar exercise and is observing NPDs (no-production days )to align production to market reality . “We align production to market demand and observe NPDs to avoid inventory build-up ,” says P Balendran , V-P at GM India . “They (NPDs) are happening frequently now ,” he said , pointing to the difficult times for petrol-only models like the Spark and U-VA minis andO ptra andA veosedans .

Toyota Kirloskar Motors has also stopped production of petrol cars . “We are having some amount of inventory for petrol cars and it has gone up to over 30 days .To control the stock from piling up ,we have stopped production of petrol cars from June 16 ,” Toyota Kirloskar Motor (TKM)deputy MD(commercial ) Shekar Viswanathan said . TKM rolls out petrol variants of its small car Liva , sedans Etios andCorolla Altis.

(curtsey: economic times)

Rupesh Yatesh Dalal
Head Research Department

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