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Automobile giant Mahindra to shut production for three days, says wont hamper market demand

Sunday, 19 January 2014 - 12:04am IST | Place: Mumbai
Mahindra & Mahindra (M&M) will stop all its manufacturing activities for up to three days this month across its automotive plants in the country.
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Mahindra & Mahindra (M&M) will stop all its manufacturing activities for up to three days this month across its automotive plants in the country.

This is done strategically to fix the production and sales needs as there has been an overzealous production tin the recent past but the market growth has been sluggish in the last quarter.

Also the demand for the vehicles hasnt seen much growth due to a free-falling rupee which has stabillised after appointment of new RBI governor who introduced a slew of reforms. 

 "The company, as part of aligning its production with sales requirements, would be observing no production days at the company's automotive plants for 1 to 3 days during the remaining period of January 2014," M&M said in a filing to the BSE  as reported by Business Standard. 

"The management does see any negative impact on availability of vehicles in the market due to adequacy of vehicle stocks to serve the market requirements," the company said in a statement.

Usually companies try to keep their production going so that the market demand balance is not affected near festive season. But, the markets won't see any major movement anytime sooner till Holi or any other festival season.

Reeling under a prolonged demand fall due to the economic slowdown, annual car sales in India have declined for the first time in 11 years in 2013, posting a 9.59% dip.

People prefer purchasing used cars to save money as the prices have increased and the market seems bleak for investing in housing and automobiles. 

The company saw its sales drop by 26.93% to 15,881 units in December 2013.

Last year, the company had shut down its tractor plants at Jaipur and Rudrapur for five days and two days, respectively, due to falling sales and over-production of vehicles. 

Meanwhile, Top Mahindra honchos will leave for Davos to attend World Economic forum soon. So, we may see some movement in the business plans and strategic alliances in the near future.  

 




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