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Business News/ Companies / News/  Lack of skilled labour affecting production operations of TVS Motor
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Lack of skilled labour affecting production operations of TVS Motor

TVS Motor Company – one of the leading manufacturer of scooters and motorcycles – is facing disruption in supply of spare parts and overall production operations due to lack of availability of skilled labour

With retail sales picking up after the removal of the lockdown in May, most manufacturers are trying to ramp up production Photo: BloombergPremium
With retail sales picking up after the removal of the lockdown in May, most manufacturers are trying to ramp up production Photo: Bloomberg

TVS Motor Company – one of the leading manufacturer of scooters and motorcycles – is facing disruption in supply of spare parts and overall production operations due to lack of availability of skilled labour around its factories, said Venu Srinivasan, chairman of TVS Motor, in the latest annual report. He also advised the dealers and suppliers to take necessary cost cutting measures to help tide over the current economic slowdown.

With retail sales picking up after the removal of the lockdown in May, most manufacturers are trying to ramp up production according to the demand. Factors like rising cases of Covid-19 and lack of availability of manpower, though, have limited the ability of auto makers to increase production of vehicles.

Sales of entry level motorcycles are likely to make quicker comeback especially in the rural and semi urban markets especially due to healthy monsoon, good summer crop and preference for personal mobility post Covid -19 pandemic.

“From the supply side, availability of manpower in tier-2 and tier-3 suppliers affecting the supply of parts and daily operations are likely risks. Casual workmen and migrant workers hailing from other states may not return rapidly, posing risks across the supply chain of the company," added Srinivasan.

According to Society of Automobile Manufacturers, sales of vehicles across categories could decline by more than 25% in FY 21 due to the adverse impact of the Covid-19 induced economic slowdown. This comes after sales in the domestic market dropped by 18% in FY 20.

Hence, the company has been urging component manufacturers and dealers to be finically prudent and conserve cash.

While government and Reserve Bank of India are taking measures for enhancing availability of credit for dealers and suppliers, the participation would be dependent on the business outlook. This could lead to challenges in working capital management in the supply chain, said Srinivasan.

“The company is cognizant and is advising dealers and suppliers to make prudent choices in cost reduction and enhance working capital management," he added.

TVS Motor Company witnessed 23.2% decline in domestic wholesale o two-wheelers to 24.10 lakh units in FY 20.

“The Covid-19 pandemic is causing paradigm shifts in consumer behavior affecting many industries including the automobile Industry. Social distancing norms followed across the globe due to Covid-19, could become the new normal. People may move away from use of shared/public transport solution," Srinivasan further mentioned.

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Published: 17 Jul 2020, 06:32 PM IST
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