Production cut, temporary plant shut down possible: M&M

Production cut, temporary plant shut down possible: M&M

New Delhi: Auto major Mahindra & Mahindra (M&M) has said that it could cut down productions and temporarily shut plants due to slowdown in sales in domestic as well as overseas markets.

“Our production will always be as per sales. As there is still slowdown in the market, so we will not over-produce," M&M President (Automotive Sector) Pawan Goenka said on the sidelines of JK Tyre Baja Sae India conference here.

“The company would not unnecessarily build up inventories at its facilities as well as with the dealers," he added.

When asked if M&M would temporarily shut down its plants in line with other auto makers, Goenka said: “If situation demands, we will shut down plant. We will take a day-to-day decision".

He said that along with domestic market, exports were also facing slowdown in each countries, where M&M is present.

“The company, which sells its vehicles in Brazil, Chile, South Africa, Egypt, other African nations and neighbouring countries, witnessed a drop of 20-25% in exports in November," Goenka said.

“M&M’s plan to enter the US market with its sports utility vehicle ‘Scorpio´ was on track and the company is expected to launch the SUV there by the end of 2009," he added.

Goenka said that the construction of the company’s upcoming facility at Chakan was also on track and would be launched by end of 2009.

“We expect to launch our small four-wheeler (LCV) in the third quarter of 2009, while the truck platform will be launched by the fourth quarter of next year," he added.

On problems faced in retail financing, Goenka said: “Lot By SSA of our financing happens through NBFCs (non-banking finance companies). The biggest problem is that these companies are not getting any funds from neither the government nor the banks. They are totally squeezed."

Asked about reports of M&M parting ways with its joint venture with Renault due to declining sales of ‘Logan´, Goenka said: “These are not true. No question of M&M getting out of ‘Logan´. In fact, we will be bringing out more variants of ‘Logan´ in the future."

“The next offering from the JV’s stable to the Indian customer would be the French carmaker’s hatchback — Sandero," he said.

He, however, declined to give any time-frame for the possible launch of the car in the Indian market.

About the marketing and distribution tie up with Renault and Nissan for their cars rolling out of the upcoming facility at Chennai, Goenka said: “It should happen soon. We are discussing some technicalities."

On its acquisition front, he said that there would be challenges in the future in finding funds for acquiring other companies.

“It has to be supported by proper strategy," he said.