The Hindu Business Line : Tata Motors sees no serious payment issue

Mumbai, Feb. 5 There could be some delay in payments to 25 per cent of Tata Motors vendors who are not under its “bill marketing scheme,” a tripartite arrangement under which bills are paid through banks, Mr Ravi Kant, Managing Director, Tata Motors, said on Thursday.

“Nearly three-fourth of the payments to vendors have been made through the bill-marketing scheme under which the vendor gets paid from banks and we pay to those banks,” Mr Kant said, suggesting that there are no serious problems regarding the company’s payment to vendors.

Reacting to media reports about huge outstanding dues to vendors, Mr Kant said, “There is no doubt that we are passing through difficult times. There is a liquidity problem, but we are not sitting on anyone’s payment.” Mr Kant, however, refused to reveal the actual outstanding to the vendors.

“Various issues regarding our business with the suppliers have been discussed at the vendor council and mutually satisfactory solutions have been brought forth,” he said.

A cross-section of vendors felt that Tata Motors can comfortably deal with the payment problem. “I think many vendors have not taken advantage of the bill-marketing scheme offered by the company. As a supplier, we have no major outstanding from the company,” said Dr Surinder Kapur, Chairman, Sona Group, who is the president of Tata Motors’ vendor council.

‘manageable numbers’

Mr Harish Sheth, Managing Director, Setco Automotives, a major supplier of clutch systems, also said that his company is not facing any problem in its business with Tata Motors. “Tata Motors is a company with an annual turnover of about Rs 30,000 crore. Of this, 60-65 per cent is spent on purchase of raw materials and components. This means they are roughly spending Rs 1,300-1,600 crore a month on component purchase. Given this, the figures quoted in the media (Rs 1,200 crore) as unpaid dues are quite manageable for them,” he said.

Tata Motors spent Rs 12,337 crore on purchase of raw materials and components in the nine months ended December 2008.

“There are no issues. We don’t have any major outstanding from the company,” said Mr V.K. Vishwanathan, Managing Director, Bosch India. Bosch is one of the major vendors which supplies diesel systems, starters and motors.

Tata Motors reported a 30 per cent drop in total vehicle sales at 35,704 in January. The company posted a net loss of Rs 263 crore for the third quarter of the financial year. Tata Motors’ share price fell 2.8 per cent to Rs 131.50 on BSE on Thursday.

Related Stories:
Tatas make efforts to weather the storm
Nano suppliers seek compensation from Tatas

More Stories on : Cars | Outlook | Tata Motors Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page