INDIAN automakers Tata Motors Ltd and Mahindra and Mahindra Ltd (M&M) said on Friday (9) they would cut production at some plants in response to slowing demand that industry executives say has driven the sector into one of its worst downturns.
Tata Motors, which had previously flagged a “challenging external environment”, said it closed some blocks at its Pune plant in the western state of Maharashtra.
The company, India’s top automaker by revenue, had last month posted a bigger-than-expected quarterly loss due to weak conditions at home and problems at its British luxury car unit.
M&M said on Friday its automotive segment, which makes passenger and commercial vehicles and spare parts, would cut production for 8-14 days at various plants during the second quarter.
Shares of Tata Motors and M&M fell between 1.8 per cent and 2.4 per cent before cutting losses in a broader Mumbai market that was 1.3 per cent higher as of 0720 GMT.
The slowdown in the sector has triggered massive job cuts, with initial estimates suggesting that automakers, parts manufacturers and dealers have laid off about 350,000 workers since April, a senior industry source told earlier this week.
The crisis has also hit smaller auto parts makers like Jamna Auto Industries Ltd. The company, whose customers include Tata Motors, General Motors Co and Toyota Motor Corp, said on Thursday it might shut all its nine plants in August due to weak demand.
“In view of the weak customer schedule and high inventory, the company has made changes in production schedule at all its plants. The plants may not run or partially run on all working days in August,” Jamna Auto said.
Jamna Auto’s shares fell as much as 8.5 per cent on Friday.
Auto components manufacturers Bosch Ltd and Wabco India Ltd have already trimmed production amid the demand slump.
Reeves has said repeatedly that she is committed to 'economic responsibility' and will maintain her fiscal rules, including her main goal of balancing day-to-day public spending with tax revenues by 2030. (Photo: Getty Images)
Reeves says both tax rises and spending cuts are being considered for the Nov 26 budget
Economic analysts estimate a potential £30 billion gap to be filled through tax measures
Government borrowing costs have risen and welfare spending cuts have been dropped
Growth forecasts are expected to be revised downwards
CHANCELLOR Rachel Reeves has said she is looking at both tax increases and spending cuts for the upcoming budget on November 26, confirming expectations that she will take steps to balance the country’s finances.
Economic analysts estimate that Reeves may need to raise about £30 billion through tax measures, after government borrowing costs rose more than anticipated and plans to reduce welfare spending were dropped. Growth forecasts are also expected to be revised downward.
“Challenges are being thrown our way... I won't duck those challenges,” Reeves told Sky News on Wednesday.
“Of course, we're looking at tax and spending as well, but the numbers will always add up with me as chancellor.”
Reeves has said repeatedly that she is committed to “economic responsibility” and will maintain her fiscal rules, including her main goal of balancing day-to-day public spending with tax revenues by 2030.
Before the general election in July 2024, Labour had pledged not to raise value added tax (VAT), national insurance contributions, or the rates of income tax. However, there has been increasing speculation that those commitments could be reconsidered as the government works to meet its fiscal targets.
The chancellor’s comments come as the Treasury prepares for what is expected to be a closely watched budget statement outlining the government’s next economic steps.
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