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Tata Motors raises production amid strike at Maruti plant

Tata Motors raises production amid strike at Maruti plant
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First Published: Mon, Oct 17 2011. 04 18 PM IST

Tata Motors technicians complete the final assembly of passenger cars. Photo: Bloomberg.
Tata Motors technicians complete the final assembly of passenger cars. Photo: Bloomberg.
Updated: Wed, Oct 19 2011. 03 04 PM IST
Mumbai: Tata Motors Ltd seems to be stepping on the gas to make the most of the opportunity created by labour strife at Maruti Suzuki India Ltd.
Tata Motors technicians complete the final assembly of passenger cars. Photo: Bloomberg.
The country’s third largest car maker has more than doubled production of cars at its Pune plant in October to meet demand created by the long waiting periods for its rival’s diesel models.
The latest strike, which has crippled production at Maruti’s Manesar plant that produces Swift, Dzire and SX4 models, follows a 13-day protest in June and a 33-day lockout that ended on 1 October.
“Maruti is unable to supply diesel cars. Tata Motors has a strong portfolio of diesel cars and is using it as an opportunity to ramp up,” said one of the car maker’s suppliers who declined to be identified. From 300 units a day, Tata Motors’ capacity has been increased to 700 units, said another supplier, who also spoke on condition of anonymity.
The ramp-up follows the launch of a new variant of the Indica Vista and other models.
Tata Motors spokesman Debasis Ray said the production ramp-up is independent of the situation at the rival firm.
“We are producing at a normal rate,” he said, adding that production is dictated by demand and has nothing to do with the strike at Maruti Suzuki. “The idea is to produce what is required.”
New model launches by rival car makers at competitive prices with advanced features have been denting sales at Tata Motors. In the nine months to September, sales at the Pune-based car maker dropped 13.35% to 150,748 units from a year earlier, according to the Society of Indian Automobile Manufacturers (Siam).
Tata Motors has also launched an aggressive advertisement campaign. A full-page advertisement in the Hindustan Times and other national dailies on Monday made a direct comparison of the new Indica Vista, fitted with additional features, with Maruti’s new Swift. Ray said the advertisement was merely to highlight the comparative advantages the new Indica Vista has over the new Swift.
The efforts seem to be paying off. According to dealers in Mumbai, the new Vista has a waiting period of two months —not heard of in the recent past for Tata cars.
“We are seeing this after a long time,” said a sales manager at one of the dealers who didn’t want to be named.
To be sure, it’s not only Tata Motors that is gaining from Maruti Suzuki’s production loss. Diesel car sales have also been soaring for other carmakers. General Motors India Pvt. Ltd, for instance, has seen a strong demand for its Beat diesel.
“There was anyway a pent-up demand for the car. I won’t attribute this to the unrest at Maruti,” said P. Balendran, senior vice-president at General Motors India.
The model, of which the company sold 10,000 units last month, now accounts for half of its total sales, he added.
Launched in August, the new Swift has a waiting period for the diesel variant of five-eight months across several cities.
Fraught with labour unrest, Maruti has been sitting on an order backlog of at least 100,000 units for the new Swift.
“All car companies are likely to benefit due to Maruti, but one of the direct beneficiaries will be Tata Motors,” said Umesh Karne, an analyst at Bric Securities Ltd.
Karne, however, doesn't expect sales to hold up. Sales may taper off after the festive season comes to an end, he said.
shally.s@livemint.com
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First Published: Mon, Oct 17 2011. 04 18 PM IST