The continuing slump in demand for commercial vehicles (CVs) is prompting top players Tata Motors and Ashok Leyland to temporarily shut their factories at Pantnagar, Uttarakhand, to avoid inventory build-up.
“The volume demand in the CV sector has witnessed a drop. Hence, for optimum line utilisation and effective productivity, it has been decided to observe block closure for two days — July 13 and July 22,” said a Tata Motors notification to its employees.
Similarly, Ashok Leyland will close its Pantnagar plant for 12 working days from July 11 to 24, the company said in a staff circular. The Chennai-headquartered firm had closed its factory for about a week in June stating that it was aligning production with sales requirements.
Along with every other vehicle category, the CV segment has also been battling poor demand. Sales slowed in the second half of FY19 due to multiple factors that have continued into the current fiscal as well.
Manufacturing output and consumption are facing a slowdown, and as also the execution of infrastructure projects. New axle-load norms implemented in September 2018 have led to a 15-20 per cent increase in capacity overnight.