Tata Motors Ltd, India’s largest vehicle maker, has halved production at its Jamshedpur plant and is reviewing its expansion plans as slowing economic growth has crimped demand for its medium and heavy commercial vehicles (CVs).

The company has also asked some of its employees at the Jamshedpur plant to work every alternate month as production has been scaled down.

“Three-four years back when we created a vision for ourselves, we thought we will double our volumes every four-five years. But now it needs a bit of recalibration,” said Ravi Pisharody, executive director (commercial vehicles business unit) of Tata Motors. “So, the expansion that we were doing in terms of facilities, infrastructure and people, that will get into a little bit of rough weather.”

Comparing the current economic downturn with that of 1999-2000, Pisharody said the problems are more deep-rooted and it’s unlikely that economic growth will bottom out despite the government’s efforts and policy changes.

Earlier this month, India forecast gross domestic product will rise 5% in the year to 31 March, the weakest economic growth in a decade. The economy grew 6.2% in the previous fiscal.

“People say that this (economic slowdown) is more comparable with the 1999-2000 period when it took a couple of years for the downturn to really bottom out,” Pisharody said. “If I look at a six-eight months horizon, the economy needs to start showing some positive signs for the sentiment to improve and we don’t see that currently.”

In the 10 months to January, Tata Motors’ commercial vehicle sales rose 3% to 432,597 units, while overall industry sales fell 0.37% to 639,806 units. Tata Motors’ sales in the medium and heavy vehicle segment, however, contracted 29% to 117,682 units in the same period.

The current downturn has forced Tata Motors to cut production by 30-50% at its plants in Jamshedpur and Lucknow, Pisharody said.

The Jamshedpur factory, which can produce as many as 11,000 commercial vehicles a month, is running at half its capacity, according to two plant officials who declined to be identified. “As the market is down, there has to be some adjustments made in promotion systems. So we have brought in a rotation system where a set of workers will work in the first month and the rest in the following month,” said A.B. Lall, head of the Jamshedpur plant.

Managing director Karl Slym expects the passenger vehicle segment to recover faster than sales of commercial vehicles.

“PVs (passenger vehicles) can turn quicker as customers in that segment are not sure whether to make a purchase decision or not because he is not sure what is happening in the economic environment,” said Slym. “So, it’s a matter of sentiment getting better. But when we talk about an uptrend in the CVs (commercial vehicles), we really don’t know. I don’t believe that growth has bottomed out. ”