Desperate times call for desperate measures. Tata Motors is seeing drastic dip in truck sales and piling stocks are causing major concerns. This has prompted the company of offer heavy discounts on trucks so as to clear inventory pile ups. Production has been scaled down and discounts on heavy trucks have been as high as Rs.5 lakhs per unit.
These slowdowns in sales and piling stocks have been completely predictable especially considering the fact that the country is in midst of severe economic upheaval not to mention high rates of interest being charged by banks. All these factors have led to a severe dip in demand and the urgent need to offer hefty discounts to attract customers back into company showrooms.
Production too has been scaled down dramatically. The Tata Motors’ Jamshedpur plant is currently working at 35% to 40% of its actual capacity while at the end of last year the company had even shut the Jamshedpur plan for over 6 days. Pune Tata Motors was also shut for 3 days to align production and demand. December 2012 sales of Tata Motors stood at 9,866 trucks as compared to 18,247 units in December 2011.
Tata Motors has revealed that they are offering discounts on their trucks, but it is not of Rs 5 lakhs (as earlier reported), but of upto Rs 1.25 lakhs. They also do not have any inventory pileups. Their inventory is in check with the current demand for commercial vehicles in the Indian auto industry.
Sales for the month of Dec 2012 has decreased marginally for Tata Motoros. Compared to 47,747 units sold in Dec 2011, the company registered sales of 47,515 units for Dec 2012. Their competitor, Ashok Leyland on the other hand registered a decline in sales of by 19.3%.
Tata Motors registered 50% decline in sales for the Medium and Heavy Commercial Vehicle segment, not overall. Ashok Leyland sales in M&HCV segment dropped by 34.2%, indicating that the demand in segment itself has declined. Tata Motors’ plants are working at 60% capacity.