Slowdown woes: Jamna Auto says plants may shun production in August

Auto components maker Jamna Auto Industries on Thursday said it may suspend production at all its manufacturing facilities this month due to poor demand from customers.

The company is a leading manufacturer of tapered leaf and parabolic springs for commercial vehicles (CVs) and caters to companies like General Motors Co, Toyota Motor Corp and Tata Motors.

The Capital-based firm has nine plants across the country and has recently diversified its range by adding lift axle and air suspension products under technical collaboration with Ridewell Corporation, USA.

"ln view of the weak customer schedule and high inventory, the company has made changes in production schedule at all its plants. The facilities may not run or partially run on all working days in August, 2019," Jamna Auto Industries said in a regulatory filing.

Plants shall carry out routine maintenance and cleaning during non-working days, it added.

The auto industry has been going on a prolonged slump. Passenger vehicles (PV) segment has been the worst hit with sales continuing to decline for almost a year now.

According to SIAM data, vehicle wholesale across all the categories declined by 12.35 per cent to 60,85,406 units in April-June against 69,42,742 units in same period of last year.

On Wednesday, auto components major Bosch said it woud temporarily stop production at its two plants separately this month for a total of 13 days to "avoid unnecessary build up of inventory.

Production at the Gangaikondan plant in Tamil Nadu will be suspended for a total of five days on August 10, 16, 17, 24 and 31. Further, production at Nashik plant in Maharashtra will also be suspended for eight days on August 16, 17 and from August 26 to 31.

The company said the decision to suspend all manufacturing operations at the two plants for the said days has been taken "with a view to adjust production to meet the demand for products and to avoid unnecessary buildup of inventory".

Earlier this month, the company had suspended all manufacturing operations at its plant at Bidadi for three days from August 1-3.

Last month, industry body ACMA had said that around 10 lakh jobs could be on the line if the prolonged slowdown in the automobile industry continues, while seeking immediate government intervention such as slashing GST to stimulate demand.

The Automotive Component Manufacturers Association of India (ACMA), which represents the auto component industry that alone employs around 50 lakh people, sought a uniform GST of 18 per cent for the entire automobile sector in order to revive the vertical which has now witnessed 10 months of continuous decline in sales.

The Federation of Automobile Dealers Associations (FADA) estimates that around two lakh jobs have been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump.