The Hindu Business Line : It's raining troubles for Pune's automobile players

THE auto industry in Pune, one of the largest in the country, has been badly hit and is likely to suffer losses worth crores of rupees due to the incessant rains that have been lashing Maharashtra during the last one week, said auto makers, auto ancillary manufacturers and dealers.

The torrential rains have affected vehicle manufacturers in Pune and the vendor community— many of them have their manufacturing facilities in the twin industrial towns of Pimpri-Chinchwad and the neighbouring Chakan, which is a major auto-ancilliary hub.

With many of these companies depending on suppliers from Mumbai and other parts of Maharashtra for input components to feed their lines, the disruption of road, rail and air transportation has put a spoke in their operations. While companies normally keep a buffer stock for at least a week, the situation is now becoming grim with stocks drying up and no sign of the rains abating. Vehicle manufacturers in Pune are now considering temporarily scaling down production to tide over the crisis brought about by the shortage of components from the suppliers' side and the companies' inability to get vehicles dispatched to key markets, including Mumbai, by road. The Bajaj Auto Chairperson, Mr Rahul Bajaj, said his company might have been "affected to some extent due to disruption at the vendors' end." But he added that the company would try to make up for any production loss by working overtime over the next few weeks after consultations with the workers' union. "This is an unprecedented situation and we have to get ahead of this in whatever way we can," Mr Bajaj said.

An official spokesperson for Tata Motors, when contacted, said the situation in the Pune plant is normal with all the lines and shifts working on schedule. "We can't, however, predict what will happen in the future," he added.

Ironically, the new Managing Director of Tata Motors, Mr Ravi Kant, was also a victim of nature's fury and his driver had to substitute for his personal assistant.

"He is in a meeting," the driver said, when asked to be connected to Mr Kant.

Brake manufacturer Kalyani Brakes, which has its operations in Chakan and Jalgaon, is now facing the prospects of production being significantly hit, with input supplies from Kolhapur, Belgaum, Chennai and Mumbai virtually non-existent.

"We had a cushion of 4-5 days of supplies, but if the situation does not improve in the next two-three days, our production will be hit by at least 20 per cent," Mr Satish Sekhri, Managing Director, Kalyani Brakes, said, when contacted.

KBX, incidentally, is a supplier to virtually the who's who of the auto industry, including Bajaj Auto, Tata Motors and, Maruti Udyog.

The auto industry's prospects for the next quarter is also being hit by the slowdown in customs clearance of import consignments at the Mumbai airport due to the rains and drop in attendance of staff, which has resulted in raw material supplies to vendors and original equipment manufacturers (OEMs) drying up this week.

"With just-in-time and other operations practices in place, none of us keep more than a 10-day stock, which is now almost over. If the situation does not normalise fast, the entire supply chain, right up to the OEMs, will be hit in the next week," a vendor to top auto companies told Business Line.

The auto industry's last and most important link to the market, its dealer network, is also badly hit by the unprecedented rains.

Informed industry sources said the stock yards of at least half a dozen dealerships of various car manufacturers were submerged in last week's rains, damaging a large number of brand new cars waiting to roll into the dealer showrooms. Mumbai's expensive real estate situation has made the dealer community head towards the Kurla-Saki Naka area to locate their stock yards, since this area is relatively more affordable.

The flip side of the story is that most of this area is low-lying and has been severely hit by the rains. Mr Bajaj philosophically said that this is an "unprecedented natural disaster for which neither the Government nor the corporates were ready. It is impossible to create infrastructure in anticipation of such disasters.

Now is the time to wake up and improve the response time. There is no use crying about it and we have to manage the situation as best as possible."

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