Major Car Makers Put Brakes On Production, Rs 35K Cr Inventory Unsold

The automobile industry is at its worst. A staggering Rs 35,000 crore worth of cars are lying unsold with dealers, according to reports. Similarly, two-wheelers worth Rs 17,000 crore are also lying unsold.

As a result, major vehicle makers such as Maruti Suzuki, Mahindra, Tata, Honda, Skoda, Nissan and others have started shutting down their productions stretching for a few days to weeks.

Production shutdown days:

Maruti Suzuki – June 23-30
Mahindra – 5-13 days in the first quarter of 2019-20
Tata Motors – May 27 to June 3
Honda – June 5-8
Renault Nissan – 4-10 days in June
Skoda – 4-10 days in June

While the output is expected to be lowered by 20-25 per cent putting less pressure on companies and dealerships, the dealers will still have to pay GST on the unsold stocks.

Maruti Suzuki currently has an inventory of 50,000 cars compared to its usual 25,000-30,000 units.

However, the country’s 2nd largest maker, Hyundai, has managed to keep production running with an increase in exports.