Ashok Leyland temporarily shuts Pantnagar plant for nine days over weak demand

India’s third largest commercial vehicle manufacturer, Ashok Leyland said it is shutting down its Pantnagar facility for 9 days this month in response to weak demand outlook in the domestic market.

In a BSE filing today, the CV maker said its Pantnagar plant will remain closed from July 16, 2019 to July 24, 2019 (both days inclusive), owing to weak demand and outlook for the industry.

According to the data released by the industry body, Society of Indian Automobile Manufacturers (Siam), total CV production in June was hit with a downfall of 23.39% year-on-year at 69,496 units. Ashok Leyland’s CV production in June stood at 12,690 units, down 21.35% YoY.

On the other hand, the company’s domestic factory dispatches last month stood at 12,085 units thereby posting a decline of 14.24% y-o-y.

For Q1 FY20, it recorded a decline of 9% y-o-y on its total CV production, which stood at 43,660 units. In comparison, the CV industry’s cumulative production saw a decline of 14.5% for the June quarter.

Ashok Leyland’s plant shut down plan comes at a time when many major automakers such as Tata Motors, Mahindra and Mahindra (M&M), Maruti Suzuki and others too have resorted to temporarily shutting down their respective plants as an inventory correction measure.

“While the pre-buy in FY20 on account of the introduction of BS VI from next year could provide the surge in demand in the second half of this year, it is important that the government and the industry bodies consultatively provide a long-term direction or a policy guideline to the auto sector that include policy announcements such as vehicle scrappage, cab code or bus body code,” said Dheeraj G Hinduja, chairman, Ashok Leyland in the company’s recently released annual report.