Lockdown-like restrictions to hit vehicle demand for some time: Tata Motors
At a time when lockdown-like restrictions have been imposed in many parts of the country amid rising cases and health emergency due to Covid-19, carmakers are India are set for a tough quarter ahead. While some of the carmakers have already delayed their forthcoming launches, or scaled down production, there is a fear that vehicle production and sales are about to be hit by the crisis.
Tata Motors feels the impact of the lockdown-like restrictions will be felt, though temporarily, and it is putting in place a plan to counter that in coming days.
Tata Motors came out with what it calls a ‘business plan’ to protect and serve the interests of its customers, dealers and suppliers to tackle the temporary drop in vehicle demand it anticipates.
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Tata Motors has issued a statement which said, "The lockdown enforced in various parts of the country is expected to impact vehicle demand temporarily. Hence, the company has set in motion a comprehensive 'Business Agility Plan' to protect and serve the interests of its customers, dealers and suppliers."
Tata Motors' plan aims to not flood dealers with inventories, but keep an "optimal level" of stock to meet demand. It plans to carefully calibrate and match supplies with demand for its cars, and be ready to increase that once demand starts picking up when the crisis subsides.
The statement issued by Tata Motors read, "The company believes this approach best serves the interests of all stakeholders by utilising the cash invested in the entire ecosystem in the most optimal manner."
Tata Motors is not the first carmaker to have revised or rescaled production after the second wave of Covid-19 pandemic has hit the country hard. Last week, Toyota Kirloskar Motor also announced that its facilities in Bidadi, Karnataka will carry out an annual maintenance program which, as per the company, is a planned exercise to be carried out between April 26 and May 14. It essentially means that the Toyota facilities will temporary halt production at these facilities and it will impact supply of vehicles manufactured.
India's largest two-wheeler manufacturer Hero MotoCorp too had announced last week that it has halted all manufacturing operations owing to the Covid-19 pandemic in the country. However, it said that the decision will not impact its ability to meet with the demand for its motorcycles and scooters in the country.