Auto Majors Skid As Stir Continues

Mumbai, New Delhi, Aug 26 | Updated: Aug 27 2004, 05:30am hrs
The ongoing truckers strike over the service tax levy certainly isnt music to the ears of the automobile and tractor industries. With the strike now into its seventh day, leading automobile makers are of the opinion that while things are under control now, they may spin out of control if the strike continues.

Significantly, most auto majors are showing signs that the panic button may be pressed any day now. While current inventory levels are just about adequate to tide over the next couple of days, times fast running out.

Tata Motors executive director (finance & corporate affairs), Praveen Kadle, says his companys inventory levels have not been affected. After the strike was declared, we had beefed up our Jamshedpur and Pune plants to take care of production requirements, he explained. But Mr Kadle conceded there could be an issue if the strike continued over the next 10-15 days.

We have also made alternate arrangements to transport vehicles by train if the situation warrants, he added.

Maruti Udyog spokesperson said vendor supplies have not been impacted as of now. Dispatches to some areas may have been hit, but there is enough stock in channel.

According to Honda Siel director NK Goila if the strike continued there could be an adverse impact on components. The company had built up an inventory for component and parts supplies. We have a dedicated fleet of trucks which is moving cars from the factory to other parts in the country, he added.

For General Motors India (GMI), the strike seems to have affected them in more ways than one. The companys vice president P Balendran points out that the disruptions have affected both inbound and outbound supplies.

First, it was the rains and now we have a situation of transport going off the roads. Both inbound and outbound supplies have been affected to the tune of 20 per cent so far. Some existing inventory levels are still being maintained, but if this continues, our activities are going to be adversely affected.

The impact is there, but it in some pockets such as Andhra Pradesh and Karnataka in the south, where the strike is strong. If it continues for another week, the impact will be greater. We have taken all efforts at the operational level for building a stock-up of components so that production is not hit, said Hero Honda executive director (corporate business) Atul Sobti.

Says Pawan Goenka, chief operating officer, automotive division, M&M: So far there had been no impact on the company. We managed to stock up supplies for six-seven days. I believe we can manage stocks for a couple of days without loss in production.

He warns that if the strike continues, it will most certainly see production being affected. M&M is evaluating options to manage its stocks properly along with a minimum loss in production. It is difficult to say which segment will be affected the most for us. Whether it would be the sport utility vehicle, tractors or commercial vehicles isnt clear yet, he said.

Despatches are in trouble in the case of commercial vehicles which are transported on road. As for tractors, there are some stocks at the dealers level and in depots, which may last a few days. said Eicher Tractors managing director RC Jain.

One company which has remained unaffected, however, is Toyota Kirloskar Ltd. According to a company official, the company had temporarily stopped its production on account of a routine plant maintenance.