"There is no sense in building up inventories as the current demand for the cars is flat," Ratan Tata, chairman of Telco and Tata group said and called upon the government to invest more on infrastructure that could help revive the demand.
Tata denied that Telco had scaled back its production target for Indica cars. "There is no scale back and we expect the demand for Indica will be at 70,000 cars in the current year. We have already replaced Santro as the highest selling car," Tata said.
On the large pile-up of Indica cars at its manufacturing facility at Chikli, near Pune, Tata said that cars need to be transported and that even a 2 to 3 days production would end up having 1,000 to 2,000 cars and this inventory pile-up at its facility is normal.
Tata said that several factors had contributed towards the slack demand for cars in the domestic market, including rationalisation of taxes in all the states, diesel price hike, over capacity and the overall weak sentiment in several segments of the industry.
The current shut down of the Indica plant facility, Tata said was for a routine maintenance and will restart operations soon. He said that Telco had received a good response for its ESS (early separation scheme) to reduce its head count. The two Pune plants of Telco have around 13,000 workers and the company is looking at reducing the head count of people who are working in non-assembly related areas.
Telco has received around 2,080 ESS applications from its workers which closed last month-end, but it will offer the retirement plan to only 1,250 workers.
A similar ESS was also offered to workers employed at the Telco's Jamshedpur facility. However, no such offer has been made to workers at the Lucknow facility as the plant has been shut down due to labour trouble.
Ratan Tata was in Pune to attend a programme organised by the Telco Employees' Union for the unveiling of the statue of JRD Tata on July 29, the birth anniversary of the man who steered the Tata group for over five decades.
The 10-feet tall statue was created by two employees of Telco: Dilip Sapate, painter by trade and Nandakumar Ingale, a welder.
Speaking on the occasion, Tata said JRD Tata had looked at Telco as a pride of the Tata group. "Nothing gave Tata a greater pride than Telco. He always wanted a car to brought out in his lifetime," Tata said.
"Telco has made the Tata community very proud. It has proved that its cars and commercial vehicles are not only sold in India but also abroad," Tata said.
Referring to the on-going slow down in the automobile industry, Tata said, "We are going through difficult times as demand is down. But I have a great sense of hope as all the Telco employees have made this company and this great industrial enterprise of India."
