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IN - TATA Motors to help suppliers deal with slowdown

Hindu Business Line reported that amid declining sales of its vehicles across all categories Tata Motors is supporting its component suppliers to deal with the slowdown in the automotive market.

Although the company has not yet offered any financial package to its vendors it is planning to help them reduce their operational costs through various measures.

TATA Motors president and chief financial officer Mr C Ramakrishnan said that “When the whole market is down and everybody is under pressure if there is any specific support or help required at the vendor level we will definitely extend that.” He however hastened to add that it does not necessarily mean that a financial package is being put together.

Elaborating the company’s steps to help its suppliers he said that “In many cases we work with the vendors to help them to reduce cost or help them improve quality or help them improve their operating efficiencies and such help and collaborative working with the vendors will always be there.”

He however did not specify any particular step that the company is undertaking to help the suppliers in dealing with the ongoing slowdown.

He said that “It may take different shapes on a case to case basis there is no major announcement I have to make it will depend on a case to case basis. Tata Motors medium and heavy commercial vehicle business is currently affected due to demand slump while the passenger car segment is seeing low volume sales along with relatively low levels of capacity utilisation for most of the manufacturers. Naturally in terms of the backward process the supply chain is affected. In India our vendor base has been there with us for sometime many of them are completely reliant or significantly reliant on us for their business. It is a relationship that has remained strong over a period of time. In ups and downs in the business we have worked together.”

Earlier this month Tata Motors had reported 52.2% fall in consolidated net profit for the October to December quarter at INR 1,636.01 crore the first decline in 5 quarters due to poor sales in domestic market and a margin squeeze at its British subsidiary Jaguar Land Rover.

Source - Hindu Business Line

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