Auto cos slam the brakes on expansion

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BUSINESS LINE

Auto cos slam the brakes on expansion

Priyanka Vyas | 2008-10-26 10:00:51

car

New Delhi: With India Inc in the grips of a slowdown, the auto sector is also feeling the pinch. Companies are both deferring their hiring plans and holding their capacity expansion plans.

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Mahindra & Mahindra, which added 1,000 white-collar employees and 2,000 workers in its assembly line over the last two years, is now slowing down its recruitment plans. “Hiring is a function of demand and supply. While in the last two years we hired around 3,000 employees, this year so far we have hired only 200,” said Dr Pawan Goenka, President (Automotive Sector), Mahindra & Mahindra.

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He, however, said that as the company’s Chakhan plant gets fully operational, it would begin hiring aggressively over the next 4-5 years to meet the demand. M&M has invested around Rs 4,000 crore to produce 3 lakh vehicles at Chakhan.

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General Motors too, which commenced operations of its second plant in September this year, is likely to defer its plans on starting a second production shift. “We were looking to start a second shift at our Talegaon plant in the next calendar year. But considering the market scenario, we will see the demand and accordingly take a decision,” said P. Balendran, Vice-President, General Motors India. He, however, reiterated that its Halol plant in Gujarat was running on course, with two shift operations.

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Adjusting production

Last week, Tata Motors also admitted that it had laid-off a section of its temporary workers at its Jamshedpur plant owing to a slowing demand in commercial vehicles. Ashok Leyland too has been adjusting production to avoid a build-up of stocks on the retail front. With limited availability of credit, high interest rates have hurt the commercial vehicle industry significantly, with a steep decline in sales of medium and heavy commercial vehicles.