Automotive companies pondering contract manufacturing to raise utilization ratio

Contract Manufacturing

Due to declining sales for over two consecutive years and predictions of recovery of the Auto-sector taking more than three years, the vehicle makers are now exploring options of contract manufacturing to utilize the idle capacities of the manufacturing units. In order to earn a profit, the Auto-makers need to utilize at least 70 percent of their total manufacturing capacity. Last financial year, before the outbreak of the pandemic, the auto-companies utilized less than 60 percent of their total available manufacturing capacity. To boost the utilization ratio, Auto-sector companies such…

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