India automobile industry Essay

Is this the worst closure for the automobile industry that youve witnessed? The sales of petrol-fuelled simple machines have been declining calendar month after month and it went unnoticed. However, diesel car sales started declining only since the plump six months. Sales of petrol cars have been declining for the past two years. This is sure the worst period, I cant think of any period in recent history thats been anything like this. The correction thats happening flat is of diesel-powered car sales.If you look back at the diesel car sales, it had a very rapid growth. Beginning of 2011, growth has been very high, till the end of last year. Carmakers had expanded capacity. There is now not much attraction for diesel cars with increasing fuel prices. There has been pregnant cut-back in petrol car production, but the cut-back in diesel car production was seen only from last month. Analysts are talking about a huge inventory pile-up at stockyards and dealerships. Is this one of the major reasons for plant leave off downs? Shut downs are happening, because there is no point producing cars which are not selling.If I have a capacity to sell 40,000 cars and the demand at once in the market is for only 30,000 cars, what do I do now? I have to scale back production. I have two ways of doing it. Either I reduce production each solar day by 25% or movement on less long time and produce 25% less. It is more economical to choose the second option, to work for a fewer number of age at maximum capacity. Because this willing help reduce overheads such as electricity, transport, water charges, etc. dole out of money goes into these. What companies are doing is working for a fewer number of days but at maximum capacity on those days.