Tata Motors has suspended operations at its manufacturing plant in Sanand, Gujarat for around 35 to 40 days, reported The Economic Times. Low demand for the Nano, which is produced at this plant, led to the shutdown.
Sanand has an annual capacity of 250,000 units but, in fiscal year 2014, the plant built a mere 21,538 units of the Nano due to low demand.
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Inventory has piled up and, for the past six months, the company has been operating the plant for only 2-3 days a week. The company has inventory of at least 8,000 to 10,000 units and some cars made in 2013 are yet to be sold.
A Tata Motors spokesperson said: “The company has had to take some tough measures. This includes keeping the plant shut instead of pushing inventory and incurring further loss. The company has been producing 2,000 to 2,400 cars every month for the last six months but a zero schedule for June was a surprise.”
The plant is being reorganised to manufacture a new version of the Nano for the festive season. It is also being re-equipped to manufacture hatchback and compact sedans based on the ‘Kite’ platform. All this will take place during the 35-40 day hiatus.
“As with all our plants, the Sanand facility is closed as per annual planning for routine upgrades, maintenance and adding of tooling flexibility for new variants. The period for this kind of maintenance work may vary and range from 3-6 weeks,” the spokesperson added.
Meanwhile, the company plans to come launch an automatic variant and a 1.05 litre Nano.
A person with knowledge of the development said: “Through different variants which include a Nano with an automatic transmission, touted as India’s cheapest automatic car, the company aims to bring Nano up to respectable volumes of 5,000 units a month. In addition to this, Tata Motors in a bid to [boost] volumes may make the new X0 or Kite model. This way, the utilisation of the plant will go up and the loss the Sanand plant is incurring can also be reduced.”
