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300 auto units ail as Tatas cut production

autos Updated: Dec 21, 2008 20:45 IST
B Vijay Murty
B Vijay Murty
Hindustan Times
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Around 300 automotive component-manufacturing units based at Adityapur Industrial Area (AIA), one of the country’s biggest industrial hubs, are heading towards sickness, mainly due to Tata Motors having reduced production.

Pramod Singh, president, Laghu Udhyog Bharati, an organisation working in the interest of protecting rights and interests of small scale and medium industries in the industrial hub, told Hindustan Times that the downsizing of production by automobile giant, Tata Motors, following the global meltdown has spelt doom on the ancillaries, leading them towards sickness.

“Entrepreneurs are closing down their units, as there is no work for them. As long as our parent company, Tata Motors, doesn’t increases its production, we would continue to suffer,” Singh, also an industrialist, said. He said government and banks were maintaining dual standards between cars and heavy commercial vehicles.

“While banks are offering loans for cars, they have frozen the same for heavy vehicles, which does not augur well for industrial growth in the state.”

Tata Motors downed its production from 450 vehicles a day to 60-70 vehicles, that too primarily on demand. Further, to reduce inventory and match production with demand, the company has gone for three block closures since last month.

“They ought to produce at least 300 vehicles per day if the ancillaries are to survive,” Singh said.

Asked whether they intended increasing the volume of production in the near future, Tata Motors spokesman Debashish Ray said that the meltdown was being felt globally, and hence there cannot be any assurance on when they would increase the volume of production. “Nobody can forecast future,” he said.