Co delays project by a year; already invested Rs 20 crore.
Atul Auto Ltd, a leading manufacturer of three-wheeler commercial vehicles based in Rajkot has decided to put its plans for rolling out four-wheeler light commercial vehicle (LCV) on a backburner at least for a year to cope up with the global recession. The company is also meanwhile planning to downsize its current production by 25-40% after January. The company’s product line mainly includes Atul Shakti-popularly known as ‘Chhakada’ in Gujarati, light commercial vehicles and special purpose vehicles.
Atul Auto’s market share in auto-rickshaw segment in Gujarat is more than 50 per cent and in India it is 5 per cent, according to industry estimates.
“Yes, we are not presently going ahead with our four wheelers LCV project. We have decided to hold it at least for a year as it is not viable currently. We have already invested about Rs 20 crore in it, but due to the global recession, we have to focus more on our current productions,” said Jayantibhai Chandra, Chairman and Managing Director of the Atul Auto.
The company’s blockbuster three-wheeler Atul Shakti has also seen the sales dipping down by 25 per cent recently. Atul Auto’s business model is completely dependent on finance and with banks and financial institutes facing liquidity crunch the company is facing hard times like all other auto players, said Chandra.
Besides, it’s also Kamurta period when people usually refrain from buying vehicles, he added.
Atul Auto is also considering to cut production from January. Currently, the company produces 1500 units per month.
Talking about retrenchment in the sector, Chandra said that Atul Auto will not go for job cuts. The company has over 700 employees. “We know time is not good, but it will definitely change. We can’t lose our skilled staff. Moreover, they are like family members to us and have stood by us in all times,” according to Chandra.
