Wednesday, October 19, 2011

Tata wants supplier units close to plants

Aims to cut costs, bring down turnaround time

Tata Motors has asked body-building and chassis suppliers for its commercial vehicles business to set up their plants near its CV and bus manufacturing plants in Jamshedpur, Lucknow and Pune to cut transport costs and bring down the turnaround time involved in producing a complete vehicle.

“We have asked four to five chassis and body-building companies to set up their assembly units near our plants in Jamshedpur, Pune and Lucknow. This will be economically good for us. There will be significant savings from it,” Ravi Pisharody, president – commercial vehicles business unit (CVBU), Tata Motors told Financial Chronicle on the sidelines of celebration of 25 years of its light commercial vehicle (LCV) — Tata 407. He, however, did not provide names of body-building and chassis manufacturers that would be setting up their facilities near Tata Motors plants.

Tata Motors manufactures a whole range of commercial vehicles at its Pune and Jamshedpur plants and buses at its Lucknow plant. “Earlier, we used to send the frames of the vehicles to the respective plants of these builders for the vehicles to be delivered. If the suppliers come close to our manufacturing facilities, it will bring down turnaround time on manufacturing of vehicles,” said Pisharody.

He clarified that orders for body-building for CVs and chassis for buses will; be split between third party vendors and its joint ventures — Tata Marcopolo Motors and Automobile Corporation of Goa — who will do some of the body-building and chassis manufacturing.

The CV business unit head expressed concern over the rising prices of steel and aluminium in the domestic market. Tata Motors’ CV sales jumped by 19 per cent to 2,43,134 units in the domestic market in the first half of this financial year. The company plans to showcase a new range of LCVs in the 3.5 tonne to 7.5 tonne category based on the Y1 platform at the Auto Expo in January next year. “We have started selling a pilot range to select customers to get their feedback. We will display the range at the Auto Expo 2012,” said Pisharody.

Tata Motors, whose passenger vehicles sales slumped in first half of this financial year, expects sales to be in the positive territory in the second half on the back of new launches - new Vista, new Indigo eCS-VX, Tata Aria 4x2, Sumo Grande and the new Tata Safari, which is expected to be launched soon.

“We have got a good response for the new Indigo eCS-VX, new Vista and Aria’s 4x2 variant this festive season. We expect to improve sales in the second half of this financial year. These vehicles will also help us in increasing our market share,” said Prakash M Telang, managing director – India operations at Tata Motors. He, however, declined to quantify the increase in market share and bookings received for the new products. The cumulative sales of Tata passenger vehicles had fallen by 16 per cent to 1,25,448 units during April-September 2011 period, as compared to the same period in the previous year.

Source: My Digital FC

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