Slowdown Blues: Ashok Leyland to halt production for up to 15 days in October

Hinduja Group-owned Ashok Leyland on Friday said that it had decided to suspend production at its plants at various locations for up to fifteen days. The Chennai-based commercial vehicle manufacturer resorted to the unscheduled production cut to correct the mismatch between production and sales.

"In a bid to align production in line with sales, the company's plants at various locations will be observing non-working days ranging from 2-15 days, during the month of October 2019," Ashok Leyland said in a filing to the Bombay Stock Exchange.

Reeling under severe slowdown, the country's second largest commercial vehicle manufacturer had reduced its production in last few months, as weak customer sentiment led by liquidity crunch, transition to Bharat Stage-VI emission norm and high product prices hit sales.

Also read: Carmakers see green shoots of recovery even as auto sales fall by 20.5% in September

Last month, the company had also observed non-working days in five plants amid falling demand for its products. The firm had said its Pantnagar plant situated in Uttarakhand would have the maximum 18 non-working days this month followed by Ennore plant (16 non-working days), Alwar and Bhandara (10 days each), Hosur 1, 2 and CPPS plant (5 days).

Auto sector slowdown has hit the Chennai-based firm, which reported a 55 per cent decline in total domestic sales at 8,780 units for September 2019, as compared to 19,374 units in September 2018. Domestic sales dipped 57 per cent year-on-year in September 2019 to 7,851 units as againts 18,078 units in September 2018.

Also Read: Auto slowdown: Ashok Leyland announces more non-working days

The worst affected category was the high tonnage trucks. Sales of the M&HCV (medium and heavy commercial vehicle) trucks tumbled 67 per cent YoY at 4,744 units in September 2019, as against 14,233 units in September 2018. Light commercial vehicle (LCV) sales were down 21 per cent YoY at 4,036 units in September 2019 as against 5,141 units in September 2018.

In August, the Hinduja Group flagship firm had posted a 50 per cent decline in total domestic sales at 8,296 units.

Edited by Chitranjan Kumar