More bad news hit India's auto sector

After auto components major Bosch Ltd, Sundaram-Clayton, Hero MotoCorp now announce temporary production shut down.

TVS group auto component maker Sundaram-Clayton Ltd (SCL) on Friday said it will be shutting its Padi factory in Tamil Nadu for two days owing to slowdown in the automotive industry, joining two-wheeler major Hero MotoCorp which also announced closure of its plants for four days.

SCL, a manufacturer and supplier of aluminium die cast products to domestic and global automotive OEMS, said it has declared August 16 and 17, 2019, as non-working days for its Padi factory.

"This is due to business slowdown across sectors," Sundaram-Clayton Ltd said in a statement.

The current slowdown in the automotive industry has forced many manufacturers and component suppliers to reduce production and plan temporary plant closures.

Earlier in the day, the country's largest two-wheeler maker Hero MotoCorp said its manufacturing plants have been shut for four days from August 15-18 as part of annual routine and also to adjust production in line with current market demand.

"While this has been part of the annual holiday calendar on account of Independence Day, Raksha Bandhan and the weekend, it also partly reflects the prevailing market demand scenario," Hero MotoCorp added.

Earlier this month, auto components major Bosch Ltd had also announced that it would temporarily stop production for a total of 13 days across its two plants at Gangaikondan in Tamil Nadu and Nashik in Maharashtra.

Bosch Ltd managing director Soumitra Bhattacharya the India auto industry was going a paradigm shift making the outlook of the industry extremely challenging, impacting structures, including surplus manpower.

He said there would be "manpower adjustments" although "every opportunity will be extended for reskilling and redeployment, to align with adjustment of portfolios and competencies".

Homegrown auto majors Tata Motors and Mahindra & Mahindra (M&M) had also said they were suspending automobile manufacturing in order to adjust production with the market demand.

While M&M will be suspending production for 8-14 days in the ongoing quarter, Tata Motors has also confirmed taking steps to align manufacturing with tapering demand.

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Photograph: Adnan Abidi/Reuters