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Ashok Leyland cuts production at its plants

Posted by Yogesh on Thursday, 6 November, 2008

MUMBAI, Nov 6 (Reuters) – Ashok Leyland Ltd, India’s second-biggest truck and bus maker, said on Thursday it is cutting production at its plants to three days a week until the end of 2008 because of falling demand for its vehicles.

On Wednesday, Tata Motors, India’s top vehicle maker, said it was closing its commercial vehicle plant in Jamshedpur for three days from Thursday to avoid a build-up in inventory.

Ashok Leyland’s move came after it reported a 50 percent slump in October sales from a year earlier, with sales of medium and heavy commercial vehicles plunging nearly 53 percent.

“During the last two weeks, medium and heavy duty commercial vehicles market has been facing problems of inadequate funding and high interest costs. Consequently, demand has come down,” the company said.

Last month a senior executive in Bajaj Auto, India’s number 2 motorcycle maker, had said that it could cut production in November after the festive season.

Ashok Leyland shares fell 9.3 percent to 17.50 rupees and Tata Motors shares dropped 12.2 percent to 159.15 rupees in a Mumbai market .BSESN that ended down 3.8 percent. Source Reuters

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