Tata Motors goes for 3-day shutdown at CV plant to reduce inventory

06 November 2008

Mumbai: Tata Motors is going in for a 3-day shut down at its commercial vehicles plant at Jamshedpur starting from 6 November. This is being done in order to reduce inventory cost. The company has attributed the shut down to a demand slump.

The company in a statement said it will take a block closure at Jamshedpur from  6 November to 8 November, to match production with demand of vehicles produced at the plant. This is ''to avoid build-up of inventory either in the company or with our dealers,'' it said.

The company says that lack of auto financing has hit sales of commercial vehicles in the domestic market, "About 95 per cent of commercial vehicles are purchased through financing. While we do not declare production rates, unavailability of finance, coupled with high interest rates, is forcing customers to postpone purchases," the company said.

In October the company's total vehicle sales fell by around 20 per cent (19.5 per cent) against October 2007, while commercial vehicles sales crashed by 29 per cent to 19,154 units, against 27,103 units in the same month last year.

Tata Motors has a 64 per cent market share in this segment, according to the Society of Indian Automobile Manufacturers (Siam).

The company's sales of medium and heavy commercial sales, which are also mostly financed were the worst affected and showed a 48 per cent decline during the month at just 7,321 units while that of light commercial vehicles declined by 10 per cent at 11,833 units.