Ahmedabad: OEMs across India will shorten production cycles to manage inventory in response to weak sales after demonetization, the Indian Automobile Manufacturers’ Association said.

While Diwali sales in Dusshera were good, the demonetization drive in the Centre affected car sales in November and December months. In 2017, he said, OEMs will need to manage their production cycles after new products are launched. This is because sales across categories have declined by 5% and market sentiment has not changed due to the liquidity crisis.

He told the Economic Times, “Some automobile companies will reduce their production shifts from three to two.”

Auto dealers hinted at possible layoffs, but SIAM He said the situation could improve in the coming months. He said, “While layoffs are not imminent, we expect more disruptions to maintenance at auto plants.”