Demand slump forces Tata Motors to shut Jamshedpur plant

NEW DELHI: Auto major Tata Motors
said it will shut down its Jamshedpur unit, the mother plant for its commercial vehicles, for three days due to
slump in demand.

"Tata Motors is taking a block closure at Jamshedpur from November 6 to November 8, 2008, to match production with demand of vehicles produced at the Jamshedpur plant to avoid build-up of inventory either in the company or with our dealers," a company spokesperson said.

Lack of auto financing has hit sales of commercial vehicles in the domestic market.

"About 95% of commercial vehicles are purchased through financing. While we do not declare production rates, suffice it to say that, as has been seen in the month of October across the industry, unavailability of finance, coupled with high interest rates, is forcing customers to postpone purchases," he said.

We are keeping a close watch on the market scenario," he added.

In October, the company reported 29% decline in commercial vehicles sales at 19,154 units, against 27,103 units in the same month last year.

Tata Motors' Medium and Heavy Commercial vehicles sales, which are mostly financed took a sever hit with a 48 per cent decline during the month at just 7,321 units while that of light commercial vehicles have also declined by 10 per cent at 11,833 units.

In October, the company had 'disengaged' 700 temporary worker from the Jamshedpur plant. While Tata Motors maintained that it was routine disengagement following completion of contract, industry analyst had pointed out that slump in demand is forcing the industry players to various cost cutting measures.
http://timesofindia.indiatimes.com/Business/Tata_shut_Jamshedpur_plant_for_3_days/articleshow/3677380.cms