Ashok Leyland to halt production at Chennai plant for five days

The Chennai headquartered automaker will be observing five non-working days starting from September 6, 2019, at its plant in Chennai. The reason behind this move is the sluggishness in the economy and the demand contraction in the auto sector.

As per market reports, workers at the plant received a communication from the company that the plant will not be working on September 6 to 11, 2019. Previously in August, Ashok Leyland reported vehicle sales of 8,296 units, down by 50 per cent. The days of no production will have an impact on around 5,000 workers working currently at the plant, which also includes 3,000 contractual personnel. 

This development comes after reports suggesting the country's auto sector is struggling due to slump in sales and possible job cuts for lakhs of employees. Recently, Maruti Suzuki India had also announced a two-day shut down at its manufacturing plants located in Gurugram and Manesar. Many companies in the auto industry are reducing their production for few months due to the slack in demand.

Road Transport and Highway Minister Nitin Gadkari assured all possible support from the government, including addressing the demand for reduction of GST to help generate the demand and revenue for auto companies.

On Friday, the stock of Ashok Leyland Limited closed at Rs. 63.9, up by 1.27 per cent. The stock had hit 52-week high of Rs. 133 and 52-week low of Rs. 56.95 on the BSE.