Auto Giants cutting short the breaks
Indian auto sector is enjoying the burgeoning demand for cars in domestic market. In November, the auto manufacturers were compelled to continue the production of its vehicles due to the order backlogs. Earlier it use to happen that after festive season production was slowed because of the fading demand. But now with increased purchasing power and buyer's positive sentiments, the auto sector is again booming with high demand. As per the market status, demands are witnessing a high growth of 25-30 per cent after festive season.
The Indian auto biggie Mahindra Mahindra and Japanese auto giant Toyota Motors have already taken short breaks from manufacturing in Diwali time. However, the US car maker General Motors and Renault, the French car manufacturers will shorten its December breaks. Mercedes, the premium car maker will also trim its Christmas holidays globally due to the growing demand in market.
The after festive time is generally considered to be slow paced in wholesale market especially in the month of December. The auto makers usually close the units with the purpose of maintenance for almost 10 days. But as this year demand has outshown supply. As per a study conducted by Society of Indian Automobile Manufacturers (SIAM), the demand in auto sector has increased by 30 per cent and by 2015, it is speculated to grow twice leading to a figure of 3 million automobiles.
Toyota Motors, globally the largest auto maker, in joint venture with Kirloskar Motors (TKM), increased the manufacturing in November by 10 per cent.
Sandeep Singh, the deputy managing director of Marketing, TKM, said that, the company this time has combined festive holidays and used them for yearly maintenance of the facilities to reduce the impact of shutdown. The company took a six day off in November to subdue the consequence on production as the company is under pressure to produce maximum vehicles from the Bangalore production unit and reduce the order backlogs. The company is already running a delay of three to four months on its vehicles Toyota Innova and Toyota Fortuner.
P Balendran, the vice president of corporate affairs, GM said that the company minimized the annual maintenance days from earlier 8-10 days to only 5 days in order to hasten the production at the manufacturing facilities. The Halol Plant is only shutdown for yearly maintenance in December which was earlier in June and also at the Talegaon unit, the maintenance is carried out at the same time. As per the senior executives from Renault, the French auto makers have reduced the December break from two weeks to one week due to the setting up systems in process.
The auto sales in India has accelerated by 25-30 per cent credit to the increasing festive demand and easily available finance. As per experts from the auto industry, the auto sales are further expected to accelerate by increased purchasing power, easy car loan available, variety of cars to select from and more. The sales target may be difficult to achieve, as the cost of manufacturing and raw materials are speculated to increase. As per the experts, the companies will be compelled to majorly localize the components to meet the sales target.
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