Tata Motors Ltd said it will close its Jamshedpur plant for three days, starting today as it aims to stop the further piling up of inventory at the dealers end, the news reports said.
A company spokesperson said; this is being done to align the production with demand. Mumbai-based company produces medium to heavy commercial vehicles at this plant, which is its oldest.
The spokesperson also said, “Inventory remains under control for now and the purpose is to produce as per the demand.”
The demand for goods carrying MHCVs have taken hit over the last two months, after a slide in the overall economic activity in the country.
In April and May, the total sales of MHCVs dipped 11% to 42, 141 units, compared with the corresponding period last year, according to the data available with the Society of Indian Automobile Manufacturers.
General Secretary of Telco Workers Union, Chandrabhan Singh said, the production had fallen in the last two months and was almost negligible since June 23. He also said the 50% of block closure would be adjusted against leave of employees and the remaining would be borne by the company.
Tata Motors commands a 53% market share of the MHCV segment in the domestic market. India’s fourth largest commercial vehicle maker namely New Delhi-based VE Commercial Vehicles said it had rationalized production recently to suit the demand.
Meanwhile, the company said it has no immediate plans of shutting its facilities. Vinod Aggarwal, Chief Executive Officer of VECV said, “As of now, we are not planning any closures as inventory is under control. The market sentiment remains negative, and so, we have slightly lowered the production level.”
Furthermore, Chennai-based Ashok Leyland, India’s third largest commercial vehicle manufacturer will not stop the production at its plants even as it remains one of the 2 companies to post an increase in sales.
Auto parts maker Bosch said it aims to adjust the production to meet the demand and to avoid build-up inventory. It has also planned to suspend manufacturing operations at its Jaipur plant on June 28-30 and at the Bangalore plant on June 29-30.
Tata Motors is an Indian multinational automotive company based in Mumbai. It is the 18th largest motor vehicle manufacturing company in the world and its products include passenger cars, vans, coaches and trucks.