Mumbai: European car major Skoda Auto Volkswagen, which is on a revival bid after the reorganisaiton of its multiple business units here under one umbrella brand, has been cutting production in a phased manner at its Chakan plant to align demand with supply.

In a statement on Tuesday, the company said it is preparing for new offerings under the India 2.0 project, which seeks to strengthen its presence at an investment of around Rs 8,000 crore and with an India specific product platform, the MQB-AO-IN.

"We are preparing for the next generation products within the India 2.0 project. Several upgrades are in progress at our facilities to accommodate changes in production lines for the new platform," Skoda Auto Volkswagen said.

The statement came in response to queries from PTI whether it is shutting down production for a month at its Chakan plant as the industry is fighting a major slump and also falling exports.

"We are systematically planning our non-production days to sustainably meet our customer deliveries without any delays," it said without giving specifics.

According to media reports, the company will halt production at Chakan between mid-December to mid-January after undertaking a similar production cut in October and November.

Last month the company had brought its three passenger car subsidiaries--Volkswagen India, Volkswagen Group Sales and Skoda Auto--into one single entity Skoda Auto Volkswagen.

The group runs manufacturing facilities at Chakan in Pune and Aurangabad.

Though the group has also set a target of capturing 5% of the passenger vehicles market by 2025, up from around 2% currently, recent media reports suggest that it could sell only a little over 3,200 units in the festive month of October with its average sales not exceeding not more than 2,500 units in the first 10 months of the year.

Besides, exports have also reportedly declined 11% during the January-October period as against the industry growing 3%.

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