Tata Motors to support vendors in demand slump

PTI
New Delhi
First Published: 21:16 IST(24/2/2013)
Last Updated: 21:17 IST(24/2/2013)
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Amid declining sales of its vehicles across all categories, Tata Motors is supporting its component suppliers to deal with the slowdown in the automotive market.

Though the firm has not yet offered any financial package to its vendors, it is planning to help them reduce their operational costs through various measures.

“When the whole market is down and everybody is under pressure, if there is any specific support or help required at the vendor level, we will definitely extend that,” said Tata Motors’ president and CFO C Ramakrishnan. He, however, hastened to add “it does not necessarily mean that a financial package is being put together...”.

Elaborating steps to help suppliers, he said: “In many cases we work with the vendors to help them to reduce cost or help them improve quality or help them improve their operating efficiencies, and such help and collaborative working with the vendors will always be there.”

He, however, did not specify any particular step that the company is undertaking to help suppliers to deal with the slowdown.

“It may take different shapes on a case-to-case basis, so there is no major announcement I have to make,” Ramakrishnan said.

Tata Motors’ medium and heavy commercial vehicle business is affected due to demand slump, while the passenger car segment is seeing low volume sales along with relatively low levels of capacity utilisation for most manufacturers, he added.

Earlier this month, Tata Motors reported a 52.2% year-on-year fall in consolidated net profit for the October-December quarter at Rs.1,636 crore, the first decline in five quarters, due to poor sales in domestic market and a margin squeeze at British subsidiary Jaguar Land Rover.

Also, in the third quarter this fiscal, Tata Motors sold 2,05,291 vehicles against 2,31,328 units a year ago, down 11.3%.


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