Auto slowdown: Hyundai halts production for several days at Chennai unit

The logo of Hyundai Motors is seen on a steering wheel of a all-new Sonata sedan on display at the company's headquarters in Seoul. Photo: Reuters
India's second largest car maker Hyundai Motor India Ltd (HMIL) has declared No Production Days (NPD) in various departments including the body shop, engine shop, transmission lines and others for multiple days in August, due to the downturn in the automobile market. This comes in line with similar measures taken by Maruti, Toyota, Mahindra, Ashok Leyland, Tata Motors and TVS Group firms to cut production days to overcome the crisis.

According to a notice issued by the company's administration department earlier this month, its passenger car plant had two NPDs on August 10 and 12 for its body shop, paint shop, assembly shop and support teams. NPD has been set for 10 shifts at its power train unit, nine shifts at another engine shop, and six shofts at transmission units.

Sources said the firm's second plant at Sriperumbudur has seldom been operational in the recent past.

Responding to a Business Standard query, the company said owing to the auto industry slowdown and flucutating market demand, "Over the past several months, Hyundai Motor India has been working on multiple strategies like tweaking production cycles, initiating new internal projects, managing the UPH (Units Per Hour) volumes etc. suitably calibrated by this situation."

"Our flexible manufacturing process is completely aligned to the market pull, and is capable of seamlessly handling varying market requirements. Specific variances of the market have been built into our Business and Operational Plan, streamlining production schedules accordingly. Both our plants are working smoothly as per the Operational plans," it added. Production downtime is planned in line with its operational plan.

Original Equipment Manufacturers and the component makers have been shutting shop for several days in a month recently, in order to align production in line with lower market sentiments. Mitsuba Sical India Ltd, a component maker has said it may reduce its production. In a letter to suppliers earlier this month, the company said it may curtail production as per the latest customer demand and requested them to restrict resources such as raw material and manpower, according to the latest schedule, to avoid pile up of unnecessary inventory that affect cash flow later. 

Sources said Toyota Kirloskar Motor Pvt Ltd also issued a notice to have no-production days for its two plants on August 16 and 17, due to low market demand of vehicles and high stock at TKM, of around 7,000 units.

Tata Motors is halting production at its Jamshedpur facility for two days, while Ashok Leyland has announced it would have a no-production day on August 17 and 19. A section of workers at Ashok Leyland's Ennore unit, which manufactures medium and heavy vehicles and intermediate commercial vehicles, continued to protest within the factory on Saturday despite the company declaring it a no-production day.

Other players who have declared no production day in the recent past and during this month, include Mahindra & Mahindra, Maruti Suzuki, Hero MotoCorp, Bosch, Jamna Auto, Wabco and Sundaram-Clayton Ltd.

Commenting on the outlook, HMIL said it expects efforts being taken by the auto industry and Government of India to start showing positive results. 

"The upcoming festive season should hopefully contribute to the demand upswing. Our operational plan is geared to handle the volumes of the upcoming months. We do not expect this to have any impact on our readiness for BS IV, and we are prepared to meet the requirements of the market," it added.