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Tuesday, December 8, 1998

Stung by recession, Ind Auto calls 3-day week at Kurla 

Murali Gopalan  
Mumbai, Dec 7: Ind Auto, the joint venture between Fiat India and Premier Automobiles, has introduced a three-day working week at its Kurla plant which manufactures the Uno and Padmini. According to sources, the move is a result of a slowdown in the automobile industry and normal operations will resume only if there is a semblance of recovery in the months ahead.

Prior to this, the plant had a six-day week which saw a daily production of around 40 Unos. The number of Padminis will, however, vary depending on demand, though on an average it was rougly 15-20 cars a day.

Sources said that output under the new schedule will be almost the same, which means around 120 Unos will roll out in a week. It is also widely believed that this rescheduling of production schedules will be inevitable in other car plants all over the country as the slowdown has not spared them either.

The Uno has been doing very well and the diesel version, in particular, has caught the fancy of consumers as it is reasonably priced andconsumes fuel which is one-thirds the cost of petrol. In fact, the diesel version has been reporting sales of around 1,000 cars a month compared to the Zen D which has been averaging barely 200 a month.

According to dealers, this is a clear indication that as far as the customer is concerned, price is still an important issue despite the brand name. The 1,700cc diesel Uno costs around Rs 4.50 lakh on-road in Mumbai, which is almost Rs 1 lakh cheaper than the Zen D.

There is still no clear indication available as far as a revival of fortunes in the car segment is concerned, but till that happens, producers like Ind Auto have decided to reschedule operations to scale down inventory. The company's decision to manufacture the Siena and Palio at its Kurla plant, instead of the new Ranjangaon facility as originally planned, also makes sense in the backdrop of this sluggish growth.

While officials maintain that there is no change in the Ranjangaon agenda, experts say the Kurla facility will suffice for themoment. The Siena, which is set to hit the roads next month, is expected to be a tough competitor in the mid-size segment as it will be favourably priced and will carry a diesel option. The Palio, which will be launched some months later, will be the car to watch out for as it has been a phenomenal success in Brazil. It also has an uncanny resemblance to the Tata Indica which makes its debut next month.

The Kurla plant has a capacity of 60,000 vehicles which, in the opinion of observers, is adequate for the manufacture of Uno, Siena and Palio. According to analsysts, the production mix could be suitably altered depending on market preferences. And at this point, they add, it makes little sense to go ahead with the Ranjangaon plant which has earmarked a capacity of 100,000 vehicles.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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