The Hindu Business Line : Tata Motors cuts car production by 20%

Change in plans
Launch of new Indica, which was scheduled to be out in Sept, may be deferred.
3 per cent decline in the passenger vehicle business during May 2007.

Pune June 7 Production of passenger cars at the Tata Motors' Pune plant has been cut to the tune of 20 per cent, while the launch of the new Indica, scheduled for launch in September, also appears to have been deferred to make adjustments for a drop in sales.

Since the last couple of days, production of the Indica, Marina and Indigo models at the Pimpri facility has been curtailed from 750 vehicles per day to 600 a day. Though, company sources say that this schedule is expected to last through the next few months, an official spokesperson denied that there had been any cut in the production of passenger cars, maintaining that the measure was restricted to commercial vehicles alone.

Dip in sales

As per the sales figures provided by Tata Motors, the company saw a 3 per cent decline in the passenger vehicle business during May 2007, against the corresponding month last year. Indica reported sales of 12,002, a decline of 3 per cent over May 2006, while the Indigo family suffered higher losses with sales of 2,215, showing a sharp decline of 22 per cent over the same month last year.

Interestingly, the Sumo and the Safari, which are not part of the aforementioned 750, accounted for sales of 3,363, an increase of 18 per cent over May 2006.

While a cut in the commercial vehicle production is "in line with market dynamics, due to the impact of the high interest rate regime on retail sales," Tata Motors is set to launch three new products in the market, two in the commercial vehicle segment and one in the passenger space.

New Products

One is the soft-top Ace, while the second is the Xenon, the new avatar of the original Tatamobile. Also on the launch pad is the `Winger', modelled on Renault's `Traffic' and a 14-seater passenger mini-bus that is expected to come at an "unbelievably attractive" price tag.

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