The country's top two automakers Tata Motors and Mahindra and Mahindra Ltd, hit by rising inventories and slowing sales, are closing their plants for up to six days in December.
Tata Motors said it will keep its plants at Jamshedpur and Pune closed for six days in December to cut down on inventories amidst a slump in demand for commercial vehicles.
Mahindra & Mahindra also is closing plants for up to six days as the tight credit market hits demand for vehicles.
Tata Motors earlier this week shut its commercial vehicle plant in Pune for three days.
The company said it would call for appropriate action from time to time to match production with demand and avoid unnecessary build-up of inventories in the company or with the dealers.
Tata Motors, India's top bus and truck maker, reported a 30 per cent drop in November vehicle sales, at 32,696 units.
Mahindra, the country's top utility vehicle and tractor maker, said most of its plants will remain shut for up to 6 days in December due to low demand.
"Taking into account the slowdown in demand for the company's products it has been decided to align the company's production plan with the expected demand for the month of December," Mahindra said in a statement.
Mahindra, earlier this week, reported a 39 per cent fall in its November vehicle sales, at 11,273 units.
Automakers across the country are cutting prices and production or are offering freebies to woo back buyers as sales slide after nearly five years of rapid growth.
The government is expected to offer some relief to the beleaguered auto industry through a reduction in excise.