The situation of the Indian auto market is really grim and it is a known fact that most of the auto makers are resorting to production shut down for several days to align their production rate as per the market demands.

This is the same story with Toyota Kirloskar Motor, which has decided to follow a regular production cut for up to 8 days each month until demand picks up. Toyota has taken this step in order to avoid inventory buildup, as the demand for the new cars drop in the Indian auto market. Thus, Toyota Kirloskar Motor will follow a monthly production slash down for up to 8 days at the company’s Bidadi manufacturing facility located near Bangalore.

The vice chairman and director at TKML, Shekar Viswanathan said that the company already has a present stock of 3,000 cars at the factory. In order to avoid further stock pile up in the factory and to align the production with the current demand for new vehicles in the Indian car market. The company has thus, begun to take production holidays up to 8 days each month from the last quarter of this year, as there is no other option for the company.

Currently, Toyota has two car plants at Bidadi, which is close to Bangalore, with total production capacity of 310,000 vehicles annually. Toyota sold about 190,000 vehicles in the current year. The company expects the overall sales to be less in the current year as compared against the last year. Viswanathan added that the company doesn’t want to make any sales predictions this year due to the slow market conditions. The company had expected its sales for the financial year of 2014 to be about 300,000 cars, but considering the present slowdown, it does not expect anything better than the previous year, he said.

In the month of June, Toyota sold 13,805 cars and recorded a decline in sales of 19 percent compared to last year, while it sold 14,470 units in July 2013 recording a drop of 10 percent compared to the same month last year.

Viswanathan added that the company will be churning out lesser than what it sold the previous year. The company has to cope-up with all the sales loss that it faced between the months of April and July, only after which the company can think of any sales growth. He also said that the company is currently operating in only two shifts in its plants.

As far as the employees of Toyota Kirloskar Motor are concerned, Viswanathan said that the company is considering retiring its older employees early, while it has already stopped new recruitments.

He also added that the company might also delay its plans to set up a diesel engine factory in India.
Recently, many other car makers in India such as Maruti Suzuki, Mahindra & Mahindra, GM India Volkswagen and Tata Motors have also resorted to production cuts, while Maruti and Mahindra also had to lay off hundreds of their workers owing to decreased production.

Tagged: Toyota