India's largest carmaker Maruti Suzuki has reportedly cut production at its Manesar diesel plant and sent as many as two hundred contract workers on indefinite leave.

Sources with direct knowledge of the matter said Maruti cut product due to a drastic decline in demand for its diesel models.

The manufacturer has also admitted that continued slump in demand has forced it to make some adjustments at the diesel plant. However, it didn't confirm report about sending contract workers on indefinite leave.

A spokesperson for the company said, "The diesel plant was operating at full capacity. With the continued slowdown in demand, some adjustments have been made at the diesel plant."

The manufacturer has reportedly shut the third shift at the diesel engine plant, which is capable of producing 300,000 units per annum.

As government-owned oil marketing companies have been increasing prices of diesel to bridge the gap between the rate of subsidized fuel and market price the demand for diesel cars has been on the decline. In June this year, Maruti suffered a year-on-year decline of 12.6 per cent in total sales at 84,455 units. Its domestic sales slipped 7.8 per cent to 77,002 units during the same month.