Tata Motors Ltd, India’s biggest commercial vehicle manufacturer, will close its Jamshedpur plant for three days, starting tomorrow, in order to stop further piling up of inventory at the dealers end.
The Mumbai-based company produces medium and heavy commercial vehicles (MHCVs) at this plant, which is its oldest. “This is done to align production with demand,” said a company spokesperson.
Last weekend, the company had briefly closed its Pune plant.
“Inventory remains under control for now. The purpose is to produce as per the demand,” added the spokesperson.
Demand for goods-carrying MHCVs have taken a hit over the last two months, following a slide in overall economic activity in the country. In April and May, total sales of MHCVs declined 11 per cent to 42,141 units, compared with the corresponding period last year, according to data available with the Society of Indian Automobile Manufacturers.
Chandrabhan Singh, general secretary of Telco Workers Union, said production had dropped in the last two months and was almost negligible since June 23. He said 50 per cent of the block closure would be adjusted against leave of employees and the remainder would be borne by the company, according to a PTI report.
Around 10,000 employees will be affected by the three-day closure, which will be followed by a Sunday, the weekly day-off. Tata Motors commands a 53 per cent market share of the MHCV segment in the domestic market.
Meanwhile, Delhi-based VE Commercial Vehicles (VECV), India's fourth largest commercial vehicle maker, said it had rationalised production recently to suit demand. However, the company added it had no immediate plans to shut its facilities.
"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," said Vinod Aggarwal, chief executive officer of VECV.
Chennai-based Ashok Leyland, India's third largest CV manufacturer, will not halt production at its plants even as it remains one of the two companies to post an increase in sales. The company is the second largest manufacturer of MHCV in the country.
Meanwhile, auto parts maker Bosch said with a view to adjusting production to meet demand and to avoid unnecessary build-up of inventory, it had proposed to suspend manufacturing operations at its Jaipur plant on June 28-30 and at the Bangalore plant on June 29-30.