OEMs to cut down shifts to manage inventories

AHMEDABAD: Industry body Society of Indian Automobile Manufacturers said OEMs with production facilities across India would cut down production cycles to manage inventories in wake of poor sales post-demonetisation.

Although Dusshera and Diwali saw good sales, the demonetisation drive by the Centre hit car sales in November and December. With sales across categories down 5% and sentiments failing to change in wake of liquidity crunch, will necessitate OEMs to manage their production cycles in wake of new launches due in 2017, he said.

"Several auto companies will bring down production shifts from three to two," he told ET.

While automobile dealers have hinted at the possibility of layoffs, SIAM says situation might improve in months to come. "While layoffs might not be imminent, expect more maintenance closures across car plants," he said.