Left with high stocks of the Tata Tiago and Tigor, the company has cut production by as much as 50 percent since May 2019, reveals Financial Express. The dealers have high inventory of these two models while the company stockyard is low on space causing the company to take this decision.
The Tiago and Tigor are produced at the company’s Sanand facility in Gujarat which contributes 60 percent to passenger vehicle production. Nexon, Harrier, Hexa, Safari, etc as well as commercial vehicles in the company’s lineup are produced from its Pune plant.
Not only Tata Motors, but automakers such as Maruti Suzuki, Mahindra and Honda Cars India are also resorting to production cuts. This is due to lower than expected sales which have been impacted by rising pricing and lack of optimum financing facilities. Production at Tata Motors dipped 53 percent in May 2019 to 5,341 units while sales of Tata Tiago and Tigor have dipped 60 percent in May 2019 as compared to sales in the same month of the previous year.
Sources claim that production of these two models will continue at this pace till the end of the August, as the company has noted a fall of 27 percent in June 2019 both in terms of passenger and utility vehicles. In view of these piling stocks, the company has also offered discounts on the Tiago and Tigor. The Tiago petrol variants can be had at an exchange bonus of Rs.10,000 and 1 year insurance at Rs.4,000 while Tigor petrol variants are presented with cash discount of Rs.25,000 and exchange bonus of Rs.25,000.
Tata Motors is also likely to phase out small diesel cars from its portfolio due to the upcoming BS VI emission standards which would make such vehicles expensive to update. The Tiago gets a 1.0 liter diesel engine while the Tigor is powered by a 1.05 liter diesel engine.
Not only in the case of the Tiago and Tigor, but Tata Motors is also cutting production of commercial vehicles. Two production lines are not in use while line speed and number of shift have also been reduced resulting in lower than normal output. Demand for M&HCVs has also dipped following Government orders on loading limits for commercial vehicles. Fleet operators received more bandwidth to load goods and hence put off making any new purchases.
