General Motors halted vehicle production yesterday (June 27) at both of its factories in India in an effort to reduce stock amid lukewarm automotive demand.
“We are aligning production on a daily basis as per demand and based on that we decide on certain no-production days to avoid unnecessary inventory buildup,” said Lowell Paddock, president and managing director of General Motors India. “We had a no-production day last week as well.”
The automaker’s production is still running slightly higher than it was in 2011, but slowing auto sales in Asia’s third-largest auto market, primarily due to higher interest rates and global economic uncertainty, are making automakers keep a close eye on supply levels. On a year-over-year basis, car sales grew 2.2 percent in 2012 through March to 2.02 million vehicle sold, while 2011 saw a 30 percent jump over 2010.
In addition, India’s government recently removed price controls on gas fuels, causing gas prices to surge and automakers to produce fewer gasoline-powered cars. Meanwhile, consumers are beginning to consider diesel-powered vehicles more frequently.
“Right now we continue to witness a period of uncertainty not only in India but globally. It’ll be difficult to forecast the rate at which our sales will grow this year,” Mr. Paddock said after introducing a diesel-powered Cruze.
The compact sedan uses the same 2.0 liter diesel mill launched in Australia and Europe. It’s good for 168 horsepower and 280 lb.-ft. of torque and returns at an impressive 17.3 kmpl (40 MPG) when paired with a manual transmission. The diesel-powered Cruze has a starting price of 1.39 million rupees ($24,261) and will be followed by a new hatchback (Sail U-VA) and Enjoy MPV. Meanwhile, the U.S. will get a diesel-powered Cruze of its own, but it is expected to be called Eco-D and cradle a different diesel engine.
The GM Authority Take
Closely matching supply with true market demand is a characteristic of the new GM, a quality that Old GM didn’t possess mind you. Other than that, who wants a Cruze Diesel?