Slowdown pain spreads: Tata Motors, Ashok Leyland, Hero halt production

About 15,000 workers, mostly temporary and casual, out of work in auto making firms over past 2-3 months, 200,000 heads roll across dealerships

As slowdown in the auto industry continues, more companies have decided to halt production temporarily. 

These include Tata Motors, Hero MotoCorp as well as TVS Group companies Sundaram-Clayton Limited (SCL) and Lucas TVs, among others. 

Already, Mahindra, Suzuki, Toyota and Ashok Leyland have announced production cuts due to the prevailing market demand scenario. Tata Motors has decided to halt production at the company’s Jamshadepur facility, which produces commercial vehicles, for two days. 

The factory will remain closed on August 16 and 17, owing to decline in demand in the market. Tata Motors went for a day’s closure on August 1. It went for three block closures from August 8-10 and the third block is from August 16.

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“The external environment remains challenging, leading to demand contraction. We have aligned our production to actual demand and adjusted the number of shifts and contractual manpower,” said the company’s spokesperson.

Ashok Leyland, which has closed some of its facilities for nine days in the last couple of months, has issued notice to employees that it is declaring August 17 and 19 as non-working days.

The measure is in line with the continuing sluggishness and contraction in the commercial vehicles market and the need to continue the corrective actions to safeguard the interest of the company, it said in the notice. The company did not respond to Business Standard’s query.

India’s largest two-wheeler maker, Hero MotoCorp, has decided to close its manufacturing facilities for four days. 

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“In line with this trend, our manufacturing facilities will be closed from August 15 to 18. While this has been part of the annual holiday calendar on account of Independence Day, Raksha Bandhan and the weekend, it also partly reflects the prevailing market demand scenario,” said the company. Hero MotoCorp has five plants in India and construction of its sixth manufacturing facility, at Sricity in Andhra Pradesh’s Chittoor district, has reached an advanced stage.  After this facility starts ops, the company’s total installed capacity will be around 11 million units per annum.

Sundaram-Clayton Limited (SCL), the holding company of two-wheeler and three-wheeler maker TVS Motor has declared August 16 and 17 as non-working days for its Padi factory near Chennai. 

“This is due to business slowdown across sectors,” said the company. Part of the $8.5 billion TVS Group Company, SCL is the leading manufacturer and supplier of aluminium die cast products to domestic and global automotive original equipment manufacturers (OEMS).

Auto component manufacturer Lucas TVS, part of the TVS Group, declared non-working days for its employees owing to overall industry slowdown. According to the notification posted by the company’s office here, Lucas TVS had already announced non-working days last month.

“As the lull in the industry is continuing, a situation has come to reduce the number of working days,” the notification shared with the employees said. Following the development, the company said it has declared non-working days for August 16 and 17. 

“A decision will be taken on how to offset the job losses on the non-working days. Employees are requested to extend their cooperation,” added the notification.

Mahindra & Mahindra (M&M) has already announced the closure of its plants for 8-14 days in July-September. Similarly, Tata Motors has announced closure for eight days, Maruti Suzuki will close for three days, Toyota Kirloskar also for eight days, Bosch for 10 days, Jamna Auto for 20 days, and Wabco for 19 days, according to reports.  During April-July, total production of the auto sector dropped by 10.65 per cent to 97,24,373 units against 10,883,730 units a year ago. During the same period, total domestic sales dropped by 13.90 per cent to 7,910,554 units from 9,187,965 units, a year ago.

Among the worst hit was medium and heavy commercial vehicle (M&HCV) production, which dropped by 22.35 per cent to 110,224 units against 141,958 units, a year ago. Passenger vehicles dropped by 13.18 per cent to 12,13,281 units from 13,97,404 units, a year ago. 

Two-wheeler production dropped by 9.96 per cent to 7845675 units from 8713476 units, a year ago.

According to auto industry body Society of Indian Automobile Manufacturers (SIAM), almost 15,000 jobs, mostly temporary and casual workers, have been lost in the automobile manufacturing sector over the last two to three months. 

Meanwhile, Federation of Automobile Dealers Associations or FADA said around 200,000 jobs have been cut across automobile dealerships in the country in the last three months.