GM to continue with production cut

General Motors India, which rolled out a new diesel variant of the Cruze last week, said that it would continue to curtail its production and take a day off every week till the festival season. "It (the one-day production halt every week) is likely to continue until the festival season (around October)," General Motors India president and managing director Lowell Paddock told reporters here.

The company had recently said that it was aligning production at its two facilities at Talegaon in Maharashtra and at Halol in Gujarat on a daily basis as per demand and decided on certain no-production days to avoid unnecessary inventory build-up. "Unlike other car makers, we don't shut down the plant and instead a no-production day. This will help us avoid an inventory build-up," vice president for corporate strategy R Balendran said.

While the Talegaon facility produces 1.4 lakh units a year, the Halol plant has a capacity of 85,000 units annually, which is being ramped UP to 1.10 lakh units. The company expects the auto market to remain sluggish for some more time and said even the festival season may not bring much cheers.

"We don't expect the market to improve before the festival season and even during that period, there is not going to be a very significant improvement as such," Balendran said. Meanwhile the new premium sedan Cruze powered by a 2-liter diesel engine with a 6-speed manual transmission will be priced at between Rs 13.84 lakh and Rs 15.66 lakh (ex-showroom-Thane), the company said.