Commercial vehicle manufacturer Ashok Leyland on Thursday declared that there will be no production in its five-day holiday at its plant in Ennore near Tamil Nadu’s capital Chennai starting September 6, excluding Sunday, Business Standard reported. The plant, which saw almost 10 days of no production last month, has been affected by a 70% fall in sales of medium and heavy commercial trucks in August.
The five days of no production will impact almost 5,000 workers at the plant, including 3,000 contract workers, unidentified officials told NDTV. The wages for the five days will be decided later, they added.
“The measure is due to continuing sluggishness and contraction in commercial vehicle market,” Business Standard quoted the company as telling its employees. “The need has arisen to continue the corrective actions to safeguard the interest of the company.”
The sale of all vehicles in the medium and heavy commercial vehicles category, including buses, dropped 63% last month to 4,585 units from 12,420 units in the previous year. The sales of light commercial vehicles fell 12% to 3,711 units in August from 4208 units in the same month last year. Total vehicle sales, including all these categories, declined 50% to 8,296 units from 16,628 units in August 2018.
Ashok Leyland told NDTV that there was no official statement from the company about the production shutdown.
This development comes amid a slowdown in the automobile sector in the country. Carmaker Maruti Suzuki on Wednesday announced that it had decided to shut down operations at its plants in Gurugram and Manesar in Haryana on September 7 and September 9.
In July, passenger vehicle sales declined 30.9%, according to the Society of Indian Automobile Manufacturers. This was the steepest decline in a month since December 2000. The overall downturn in the market stood at 19%. The industry is in crisis, with 15,000 jobs lost in the last quarter and almost 300 dealerships closed in the last 18 months. The decline in consumer confidence, coupled with a crisis in non-banking finance companies, have caused a steep fall in passenger car sales.
Union Minister of Road Transport and Highways Nitin Gadkari on Thursday assured the industry of all the help it needs from the government, including discussion on the matter of reduction in Goods and Services Tax with Finance Minister Nirmala Sitharaman.
Gadkari said the government was planning to reduce GST on hybrid electric vehicles, similar to the reduction for electric vehicles, from 12% to 5%. He added that he would discuss the possibility of providing export incentives to automobile makers like it was done in the sugar industry.
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