Tata Motors is facing a severe liquidity crunch, managing director Ravi Kant said on Thursday.
The company, India’s largest maker of buses and trucks, is now banking on a possible ‘bailout’ package from the government, expected to be announced by end of March. It also expects a turnaround in the passenger car and commercial vehicle market in the coming months.
“We cannot divulge our current cash position. But we are facing a liquidity crisis,” Ravi Kant said in response to a question from Hindustan Times.
The company has been unable to meet certain payment commitments and is in a dialogue with its suppliers for uninterrupted supply of parts to its plants.
“This is a difficult time for the industry and we need to rally around in this time of crisis,” Kant said.
Kant was instrumental in the turnaround of Tata Motors in 1999. Two years after he joined, Tata Motors almost sank after reporting a net loss of Rs 500 crore.
Tata Motors hopes to tackle the payment issue with its vendors through a vendors’ circle, which now number in a few hundred, down from more than a thousand a few years back. 75 per cent of Tata Motors vendors and suppliers are part of this vendors’ circle, which is headed by Surinder Kapoor of Sona Koyo, manufacturer of steering equipment.
The company, along with a few other carmakers, is currently lobbying for more support from the government and nationalised banks, Kant said.